Another round of strong jobs numbers should see the Reserve Bank delay any interest rate cuts for some time to come.
Employment rose for the eighth straight month in March, with 25,700 extra jobs and a revised 10,800 increase in February jobs, which was previously reported as a 4,600 increase.
Full-time jobs jumped by 48,300 and part-time jobs fell by 22,600, which led to much stronger overall jobs growth than expected, with most economists tipping an increase in total jobs of only 15,000.
RBA set to remain in neutral
The RBA has moved to a neutral stance on official interest rates and indicated that it would consider cutting them if employment started to struggle but there were no signs of that in the February and March numbers.
The unemployment rate did rise from 4.9% to 5% in seasonally adjusted terms but in trend terms it remained steady as a rock on 5%.
Big states doing well on jobs
Unemployment was particularly low in the big states of NSW (4.3%) and Victoria (4.6%), showing that despite low wages growth and tepid consumer spending, the economy is still doing well on the jobs front.
The participation rate also remained strong, at 65.6% in trend terms which remains on a record high.
Good news for ScoMo
The strong jobs numbers are good news for Scott Morrison and the Coalition Government, playing into his “good economic manager narrative” that is one of the few positives the government has to campaign on, given the internal divisions that have been all too apparent.
There is a risk though, with one more set of jobs numbers due before the 18 May election, which could obviously go either way.
The stronger jobs numbers should also be positive for retailers and retail sales because more people in secure jobs have more money to spend, even if consumer debt levels are high and the negative wealth effect from falling property prices is a drag.