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Investing.com-- Australia’s job market surged much more past expectations in January, mainly attributable to gains in the female workforce, showing continued resilience in the labor market.
The total number of employed people grew by 44,000 in January, data from the Australian Bureau of Statistics showed on Thursday. The reading was significantly higher than expectations of 19,400 people, but was below the 56,300 seen in the prior month.
This brought Australia’s participation rate- which gauges the percentage of the population that is in the labor space- to a record high of 67.3% in January, against expectations it would remain steady at 67%.
The unemployment rate rose to 4.1% in January, in line with forecasts, and compares with a 4.0% rise in the previous month.
"Most of the rise in both employment and unemployment in January reflected rises for women, with female employment rising by 44,000 and unemployment by 24,000. In contrast, male employment and unemployment both changed by less than 1,000 people," Bjorn Jarvis, ABS head of labor statistics said in a statement.
Earlier this week, the Reserve Bank of Australia (RBA) reduced the cash rate by 25 basis points to 4.1%, marking the first cut since November 2020.
In its statement, the RBA noted that inflation had decreased more rapidly than anticipated in the December quarter, indicating easing price pressures. The central bank also observed subdued growth in private demand and a moderation in wage pressures.
However, it highlighted that some recent labor market data were unexpectedly strong, suggesting a tighter labor market than previously thought. The RBA projected the unemployment rate to rise slightly this year, stabilizing just above 4%, supported by anticipated economic growth in the coming years.
This rate cut aimed to balance the need for economic stimulus with caution due to global uncertainties and domestic wage dynamics. The RBA acknowledged upside risks and expressed caution regarding further policy easing.
Strength in the labor market has also kept inflation underpinned amid strong consumer demand.