CANBERRA: The unemployment rate is expected to have held steady at 5.9 per cent in March, with the Reserve Bank watching for signs the job market is softening. The number of Australians with a job is expected to have risen by about 20,000 in the month, according to the median forecasts of 12 economists surveyed by AAP. After a surprisingly weak result in February, when the unemployment rate jumped to 5.9 per cent from 5.7 per cent, the focus will be on any movement in the headline figure when the numbers are release on Thursday, JP Morgan chief economist Sally Auld said. The Reserve Bank of Australia will in particular be watching the jobs figures for any further weakness in the labour market. “The release is a key marker for the RBA given that any further rise in the unemployment rate would challenge the bank’s strategy of accepting a drawn-out return of inflation to target,” she said.
National Australia Bank economist Tapas Strickland said RBA governor Philip Lowe recently described the labour market as “pretty soft”, and will want to see an improvement before the central bank can be confident that growth in the overall economy is strengthening. But Mr Strickland said a clear break had emerged between the official employment figures and leading indicators such as NAB’s business survey and ANZ job advertisements, which has led many analysts to doubt the veracity of recent labour force data. “The RBA (like the market) is holding faith to forward-looking indicators which still point to continued growth in employment over the period ahead,” Mr Strickland said.
The most recent monthly NAB business survey, released Tuesday, showed labour capacity utilisation was rising, said JP Morgan senior economist Ben Jarman. That has historically given a strong indication that unemployment should be lower, and may give reason for RBA officials to ignore some of the weakness in recent labour market reports, he said. “This week’s March labour force survey will, therefore, be an important test,” he said.
