Australian employment scored another solid increase in February as hiring for full-time positions surged, though the unemployment rate still edged higher as more people went looking for work.
Thursday’s figures from the Australian Bureau of Statistics showed 17,500 net new jobs were added in February, just under forecasts of 20,000. It was the 17th straight month of rises, the longest such run since the series began in 1978.
Annual job growth of 3.5 per cent was more than twice the pace of U.S. job creation of 1.6 per cent. Full-time jobs jumped a huge 64,900, more than making up for a sharp fall in January.
The unemployment rate nudged up to 5.6 per cent, from 5.5 per cent in January, and has hovered between 5.4 per cent and 5.6 per cent for 10 months now.
The participation rate climbed to 65.7 per cent, matching the highest since early 2011, as more women entered the labour force.
With labour supply expanding to meet demand, there was less upward pressure on wages and inflation and thus no near-term trigger for a rise in interest rates from the Reserve Bank of Australia (RBA).
Just this month the head of the central bank declared there was no strong case for a rate rise given wage growth continued to lag far behind job creation.
Interest rate futures showed little change in the odds of a rate rise, with a move by December seen as only a 50-50 shot. A hike in the 1.5 percent cash rate is still not fully priced in until May next year.
That is a marked contrast to the United States where rates rose to 1.50-1.75 per cent on Wednesday, taking them above Australian cash rate for the first time since 2000.
The Federal Reserve is also projecting two more hikes this year and three next, a scenario that would open a gap with Australian rates not seen in modern history.
The RBA still hopes that divergence will soften the local dollar and give a competitive boost to Australian exports. So far, the market has failed to cooperate with the Aussie jumping 1.1 per cent overnight to reach $0.7765.
Widening budget and current account deficits, chaos in the White House and stronger economic growth abroad, particularly Europe, have all been cited as reasons for the surprising underperformance of the U.S. dollar.