Unemployment at highest level since 2009
Economists say the Reserve Bank is expected is keep interest rates on hold next month despite the unemployment rate rising to its highest since 2009.
It rose to 5.6 per cent in March, the highest in 3½ years, with the economy losing 36,100 positions, reversing about half the gain of the previous month.
Full-time jobs fell 7400 and part-time jobs 28,700, Bureau of Statistics data released on Thursday showed. The participation rate fell 20 basis points to 65.1 per cent in March.
"This means that the RBA is not going to ditch its easing bias any time soon," said ANZ's head of Australian economics, Justin Fabo. "But equally, though, it's certainly not enough to make them pull the trigger for further cuts in coming months, because they have been expecting the unemployment rate to drift a little higher."
Victoria and Queensland recorded the largest falls, losing 9300 and 7400 jobs respectively. Tasmania's jobless rate jumped to 7.3 per cent from 6.6 per cent.
The dollar dropped half a cent after the figures were released, but recovered to hover at US105.2¢.
Analysts said looking beyond the volatility of the seasonally adjusted monthly figures, the trend estimates showed the jobless rate slowly rising. "There is a clear upward trend in the unemployment rate now, and that suggests the economy is growing below its average pace," said Brian Redican at Macquarie Securities.
"If you look at business surveys, hiring intentions are very weak. The [Bureau of Statistics] survey of job vacancies is falling at quite a rapid pace and is at a low level, so there doesn't seem to be the circuit-breakers to turn this around any time soon."
The number of jobs created, which is growing at about 12,600 a month in trend terms, was failing to keep pace with the strong growth in population, analysts said. The labour force is growing at about 25,000 a month.
Although the rise in unemployment raised the prospect of a cut to the cash rate, market expectations remain low. Markets were pricing in a 24 per cent chance of a cut next month. They were forecasting at least one 25-basis-points cut for the rest of the year.