According to data released by the Australian Bureau of Statistics on the 14th of March, Australia witnessed the strongest job growth in February in more than a decade. The job growth is expected to be a kick-off of a recovery in the job market, but it also means that chances of more interest rate cuts will shrink.
Strong job growth
The survey by the Australian Bureau of Statistics revealed that approximately 71,500 jobs were created in February and surprisingly it was the biggest increase in total employment in about 13 years. But that is not the end of good news as figures indicated the strong rebound in consumer confidence, not to mention the findings pointed out signs of recovery in housing sector and retail sales as well.
The Australian Bureau of Statistics underlined that full-time employment climbed by approximately 17,800, while part-time employment increased by astonishing 53,700. As for the unemployment rate, the figures showed that it remained at 5.4 percent, compared to analysts’ projections of a 5.5 percent increase. Moreover, Australia saw its participation rate, which is a ratio between the labor force and the population, advance to 65.3 percent in February from 65 percent in January.
Analysts are strongly convinced that the latest figures are a good sign showing that the Australian economy has started improving. Some analysts underline that the strong job growth of 71.500 was surprising as they estimated that only 9.000 jobs would be added in the month. But at the same time, they note that with these strong numbers, the authorities will probably stick to their current policy settings.
It is worth underlining, however, that there are some experts who are more careful when it comes to analyzing data released by the Australian Bureau of Statistics. They point out that the households, which were surveyed in February, turned out to be rather unusual. Therefore the increase in employment in February is so surprisingly high.
Australia and its neighbors
The fact is that Australia has not suffered from the financial crisis as much as the United States and the state-members of the European Union have. However, analysts have started been concerned over further development of the economic situation in Australia as they believe that the mining boom might come to an end in the near future.
Nonetheless, the latest figures can be regarded as a sign that Australia has joined the economies of its Asia-Pacific region enjoying economic improvement. Prime Minister Shinzo Abe has been introducing its new policy, known as ‘Abenomics”, which is aimed at putting Japan back on the growth track . And according to estimates, Japan will record positive industrial output figures for January.
In addition, New Zealand has already noted that it would probably keep it borrowing costs at the same low level, showing growing confidence. But analysts note, that also Australia will not have to cut its rates as there is no need for that owing to strong job growth in February which showed that the current steps were effective. But the fact is that when it comes to big moves in any indicator, one should be careful not to over-analyze them.