Unemployment rate drops to 5.6 per cent

The unemployment rate unexpectedly dropped to 5.6 per cent prior to the JobKeeper wage subsidy ending in March.

This followed an equally surprising decline to 5.8 per cent in February. 

The Australian Bureau of Statistics said the number of people employed in March rose by 70,700, more than double what economists had been expecting.

While full-time employment fell by 20,800 in the month, part-time employment jumped by 91,500.

Any impact from the end of JobKeeper will start to be seen from the April figures, which are due on May 20 – the week after the federal budget.

More than one million people were estimated to still be on JobKeeper in the first three months of the year.

Treasury has forecast as many as 150,000 could have lost their job as a result of the wage subsidy ending.

However, demand for workers has been extremely strong, suggesting the momentum of the rebound from last year’s recession may be sufficient to absorb any JobKeeper-related job losses.

Just this week, preliminary figures from the National Skills Commission showed vacancies posted on the internet soared to a 12-year high in March following a huge 19.1 per cent increase in the month.

Other forward indicators of employment growth have been equally robust.

Business conditions also struck a record high in March, and solid forward orders suggest activity is set to grow further in coming months, a positive for future hiring intentions.

At the same time, consumer confidence has struck an 11-year high, an indication that households could be keeping retailers busy.

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