Australian jobs data for May was better than expected, according to AMP Capital – with the unemployment rate falling to six per cent.
According to the Australian Bureau of Statistics (ABS), the unemployment rate fell from 6.2 per cent in April to 6.0 per cent in May.
The ABS reported that the number of people employed increased by 42,000 to 11,759,600 – driven by increases in part time employment for females (up 29,800) and full time employment for males (up 15,900).
AMP Capital head of investment strategy and chief economist Shane Oliver said: “The May jobs data support the view that the economy is nowhere near as weak as the doomsayers would have it."
While the May data is positive, Mr Oliver said the results are likely to cause an overreaction regarding the strength of the jobs market.
“Monthly jobs growth resembles a random zigzag that looks more like statistical noise rather than a reliable indicator of actual jobs growth,” he said.
Mr Oliver pointed out that the acceleration in annual jobs growth to two per cent is contrary to the slowing trend in economic growth.
“As a result, we think it’s premature to conclude that the unemployment rate has peaked.”
Mr Oliver added that while the May data supports the Reserve Bank’s decision to leave interest rates on hold, the data is not convincing enough to end the easing cycle.
“With the weak outlook for non-mining investment, a fall back in consumer confidence and a still too-high Australian dollar, another rate cut at the August RBA meeting remains a 50/50 proposition,” he said.
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