Australia's unemployment rate experienced a notable decline in May, accompanied by a significant rise in employment, according to official data released on Thursday. This development suggests a relatively tight labor market.
The Australian Bureau of Statistics reported that the jobless rate decreased to 4.0 percent in May, aligning with expectations, down from 4.1 percent in April. The number of unemployed individuals fell by 9,200 in May, counteracting an increase of 33,000 in April.
Simultaneously, employment surged by 39,700 compared to the previous month, exceeding the anticipated growth of 30,000. The participation rate remained stable at 66.8 percent in May, slightly above the forecasted 66.7 percent.
"In April, we observed a higher-than-usual number of unemployed individuals waiting to start work," said Bjorn Jarvis, head of labor statistics at the ABS. "The decline in unemployment and the rise in employment in May reflect these people commencing or returning to their jobs."
Jarvis highlighted that both the employment-to-population ratio and participation rate are significantly higher than their pre-pandemic levels. "Alongside elevated job vacancies, this suggests the labor market remains relatively tight, although less so than in late 2022 and early 2023," he added.
Additional data revealed that full-time employment increased by 41,700, while part-time employment saw a slight decrease of 2,100. Abhijit Surya, an economist at Capital Economics, noted that although the unemployment rate fell again in May, leading indicators pointed to a potential increase in the coming months.
Surya suggested that, based on the data, the Reserve Bank of Australia is likely to maintain its "wait and see" approach for the time being.
