Labour market still tight in Australia

The 17,900 increase in employment in March kept the unemployment rate unchanged at 4.3%, around the middle of the 4.1–4.5% range it has traded in over the last year. Indeed, while the unemployment rate has ticked higher since the start of the year, the ABS still estimates that it is generally trending lower.

• The March labour force survey was conducted over the first half of the month, which means it likely precedes any potential economic impact from the conflict in Iran and higher fuel prices. We’ll be watching the April release for any early signs of an impact on the labour market.

• Today’s data highlights that the labour market remains tight. It would have required a large shift in the data to alter the RBA’s thinking, given the current pressure on inflation and risks to inflation expectations. On that basis, we still expect the RBA to raise rates by 25 basis points at its upcoming meeting in May.

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