Economists have been left stunned by new data showing the unemployment rate fell in March from 5.7% to 5.4%.
Most economists had expected the unemployment rate to rise to 5.9% in March, given a spate of sackings, rising insolvencies and continued falls in business confidence.
Get daily business news.
The latest stories, funding information, and expert advice. Free to sign up.
But data from the Australian Bureau of Statistics shows total employment increased by 27,300 jobs to 10,798,900. Full-time employment increased by 49,100 to 7,672,700, and part-time employment decreased by 21,800 to 3,126,200.
The data will give weight to suggestions from some economists and commentators that the early signs of an economic recovery were becoming evident.
It could also contradict predictions from some commentators – including Federal Treasurer Wayne Swan – that unemployment could eventually hit 10%.
Economist Matt Robinson from Moody’s Economy described it as a “damn good result”.
”This is going to leave a lot of people gobsmacked. You’ve got to take your hats off to policymakers, both government and the central bank, that have taken aggressive actions that look as if they’re working,” he told The Age.
But TD Securities senior strategist Annette Beacher told Business Spectator she was skeptical about the result as there was no economic justification for the bounce.
“I’m in shock. There’s absolutely no economic justification for a bounce in employment. I’m just ploughing through the ABS report to see if there’s a new standard error, but I can’t see anything, so I’ll have to treat the data with skepticism,” she said.
“Given unemployment is expected to rise in the current environment as growth is slowing, this could be an outlier.”