Unemployment falls

There has been an unexpected improvement in Australia's unemployment rate.

Ahead of the release of today's official figures for June, forecasts had centred on an unchanged jobless rate of 4.3 per cent.

Instead it has come in at 4.2 per cent. In addition the February unemployment rate was revised down to 3.9 per cent, the lowest figures since the quarterly reading of 2.7 per cent in August 1974.

Earlier this month the Reserve Bank said it saw tentative signs of an easing in labour market conditions.

But after a drop in May, total employment in June has surged by 30,000.

Westpac senior economist Anthony Thompson says there should not be an impact on interest rates despite the strong recovery in employment growth.

"Our view is that interest rates are going to remain on hold for quite an extended period," he said.

"If they are adjusted at all this year we see the risk is for a further tightening.

"But that would be from some resurgence in demand against the trends that we're seeing at the moment."

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Thu 10th July 2008 - 01:49pm