April 9, 2004

The armour-plated economy added 67,000 new jobs in March, slicing the jobless rate to a 15-year low of 5.6 per cent.

Despite higher interest rates and a slowing housing market, the economy registered its biggest monthly jobs gain for more than a year. 

This pushed the number of people with a job to a record high of 9.64 million.

The jobs surge reversed a small fall in employment in February and reduced the unemployment rate from 5.9 per cent to 5.6 per cent. The last time the unemployment rate was lower was in 1981.

The Prime Minister, John Howard, said the figures were good news for families. 

"This is a wonderful human dividend of good strong economic policy," he said.

Mr Howard would not say if he thought the jobless rate could go lower, but he claimed the economy had not been stronger since the 1960s.

The Treasurer, Peter Costello, said the figures underscored the resilience of the economy. "I think employment growth will continue," he said.

Mr Costello said the unemployment rate had been below 6 per cent for an extended period without pushing up inflation. 

"The unemployment rate has been below 6 per cent now for seven months. Five or 10 years ago, it was thought that Australia wouldn't be able to run unemployment below 6 per cent consistent with low inflation, but we have, we have now for seven months. So, we don't want to be afraid of creating more jobs in Australia, we ought to try and create more jobs in Australia . . . let's not try and look for a dark side in relation to these figures, let's take this as a spur to continuing economic reform," he said.

Employment has risen by 2 per cent over the past year, in line with the average increase over the past decade.

Economists said the figures showed "quality jobs growth" in March, with full-time jobs up 39,200 and part-time jobs up 27,800. The proportion of people in work or looking for work - the participation rate - rose from 63.5 per cent to a 10-month high of 63.7 per cent.

Unemployment in NSW fell to 5.2 per cent in March from 5.4 per cent - the lowest rate since the Sydney 2000 Olympics.

A Commsec senior analyst, Craig James, said: "To find a lower unemployment rate in NSW you have to go back nearly 23 years."

Royal Bank of Canada economist Su-Lin Ong said the robust jobs statistics were at odds with recent relatively weak housing and consumer spending figures.

HSBC senior economist Anthony Thompson said the jobs figures would boost consumer confidence and spending.

"Whilst domestic demand growth will slow this year, this slowdown will be cushioned by relative resilience in consumption spending," he said.

The likelihood of tax cuts of up to $10 billion in the May federal budget will also boost consumer spending in the second half of the year.

Labor's employment spokeswoman, Jenny Macklin, welcomed the strong employment result but drew attention to the teenage jobless rate. "Youth unemployment is still too high - with more than one in five teenagers out of work," she said.