Australian unemployment in surprise jump
Australia's unemployment rate unexpectedly rose in July to 5.1 per cent, data showed on Thursday, hitting its highest level since November last year in a sign the mining-powered economy is slowing.
The Australian Bureau of Statistics (ABS) said the jobless rate increased 0.1 percentage point from June after the economy shed 100 jobs - much worse than the 4.9 percent rate and 13,750 extra jobs expected by the market.
Coming as consumer confidence slumped and retail sales had all but stalled, analysts said the weak jobs data would increase pressure on the Reserve Bank of Australia to cut its official interest rate -- at 4.75 percent since November.
"The RBA will consider this along with everything else, and this is just another piece of information that is pretty weak," said Deutsche Bank's Phil O'Donaghoe.
The Australian dollar slumped to 101.39 US cents immediately after the data, from 102.11 shortly before, but recovered to 102.60 within an hour.
Analysts expect unemployment, a lagging economic indicator, to soften further in coming months, with Macquarie Research economist Ben Dinte predicting a "gradual increase rather than a decline."
RBC strategist Michael Turner said "most of the leading indicators are also pointing towards weaker numbers", complicating the central bank's task of lowering inflation linked to the mining boom while easing the burden for households.
Australia's jobless rate has been steady at 5.0 percent or below since the end of 2010 after peaking at a relatively shallow 5.8 percent during the global financial crisis.
Canberra has forecast unemployment to fall to 4.5 percent by mid-2013.
Although Australia weathered the global financial crisis without entering recession, natural disasters at home and abroad saw its economy contract in the first three months of 2011, while consumer sentiment is bleak.
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