RBA off hook as Australian employment on rise

The pressure has lightened off the broad shoulders of Australia's Reserve Bank, after a surprise seasonally adjusted unemployment rate stood tall at 5.5 percent in April, according to figures released by the Australian Bureau of Statistics (ABS) Thursday. The ABS reported the number of people employed increased by 50, 100 to 11,663,200 in April. HSBC Australia New Zealand chief economist Paul Bloxham said the numbers relieve pressure on the Reserve Bank of Australia (RBA) may not need to cut the cash rate again. "Employment does look as though its been improving since the beginning of the year. So we're still of the view that the slump in growth may be behind us and the RBA may not need to cut again." According to the ABS, both full-time and part-time employment increased, with full-time employment up 34,500 to 8,159,700 people and part-time employment up 15,600 people to 3,503,500. The increase in total employment was driven by increases in part-time and full-time employment for both males and females. Alvin Pontoh, Asia-Pacific Macro Strategist of FX & Rates Strategy with TD Securities, noted that while the survey is " notoriously volatile," it does provide more confidence that the RBA will hold back for the near future, after this week's cut. Swap markets have pared back their expectation for a June rate cut from 40 percent to 20 percent, according to Pontoh. "Overall, we stick to our view that the RBA is "done" at 2. 75 percent, but we suspect the Bank's easing bias isn't going anywhere while the AU dollar trades between 1.02 and 1.05 U.S. dollars, as part of the RBA's apparent management of the currency, " he said. The number of people unemployed decreased by 2,700 to 685,300 in April, the ABS reported. The ABS monthly seasonally adjusted aggregate hours worked series increased in April, up 10.9 million hours (0.7 percent) to 1,643.3 million hours. The ABS reported a seasonally adjusted labor force participation rate increase of 0.2 percentage points to 65.3 percent in April.