Unemployment drops to 5.5 per cent

Unemployment rate drops to 5.5 per cent as more Australians find work. Source: Supplied

THE national unemployment rate dropped to 5.5 per cent with more than 50,000 people finding work last month with the majority in full-time jobs.

Despite concerns unemployment will tick-up above 6 per cent in the coming months as growth remains sluggish, the official data shows unemployment fell 0.1 per cent in April.

This beat market expectations of total employment rising by only 11,000 last month with the unemployment rate at 5.6 per cent.

The surprise decline in unemployment pushed the Australian dollar back above $US1.02 as it reduces the prospect of another interest rate cut next month.

The only major states to underperform and register a lift in unemployment were Victoria up 0.1 per cent to 5.8 per cent and Western Australia at 5.2 per cent, up from last month's 4.8 per cent rate.

CommSec chief economist Craig James said that while the job market isn't as strong as the latest numbers imply the result should be celebrated.

"Overall the job market is in good, but probably not great, shape," he said.

"Still the jobless rate remains well below 6 per cent a level that it has held below for almost a decade. The last time that the jobless rate remained below 6 per cent for an extended period was in the 1970s. Clearly this is a result to be celebrated."

The Australian Bureau of Statistics data shows total employment was up 50,100 to 11.663 million in the month, seasonally adjusted.

Full-time employment rose 34,500 to 8.16 million last while part-time employment was up 15,600 to 3.504 million.

In another surprise the participation rate - number of people seeking work - was 65.3 per cent, up from 65.2 per cent in March.
 

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Dollar drops one cent after Fed minutes

THE Australian dollar has fallen more than one US cent as it looks likely there could be an early end to the US Federal Reserve's stimulus program.

At 7am AEDT today, the local unit was trading at 102.44 US cents, down from 103.65 cents yesterday.

The currency reached an overnight low of 102.43, its weakest level since Tuesday of last week.

The minutes of the Fed's January policy meeting show that some members were worried that the bond-buying programs could eventually escalate inflation and unsettle financial markets.

BK Asset Management managing director Kathy Lien said the US dollar rallied against all the major currencies after the remarks were released.

"The real reason (the Fed) is considering an end to the program is because they see a significant improvement in the labour market," she said from New York.

Ms Lien also said the Australian dollar was one of the hardest hit because the Reserve Bank of Australia's (RBA) monetary policy stance was in stark contrast to what the US Federal Reserve was now considering.

"Australia is looking at the possibility of cutting the interest rate next month and the US is looking at the possibility of unwinding some of this emergency stimulus," she said.

Tomorrow, RBA governor Glenn Stevens will appear before the House of Representatives committee. Ms Lien said the testimony has become more important after the release of the US central bank's January minutes.

"The Aussie dollar has fallen quite a bit, much more than the euro, the yen or the Canadian dollar," she said. "The reason for that is because the RBA is looking at the possibility of easing."

"If the governor confirms this, that would compound the losses and could take the Aussie dollar to a level below 102.00 US cents."

Ms Lien said she expected the Australian dollar to trade in a range between 101.75 US cents and 102.75 cents today.

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