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Australia's slow employment growth may delay Reserve Bank rate rise

05-12-2011 16:03 BJT

SYDNEY, May 12 (Xinhua) -- Slow growth of employment in Australia may delay the central bank's rate rise but an August hike remains likely, economists said on Thursday.

The Australian Bureau of Statistics (ABS) reported on Thursday that Australia's unemployment rate was steady at 4.9 percent in April.

The number of people employed decreased by 22,100 people to 11, 436,500 in April, the ABS said.

The April drop in the total number of jobs followed a surge of 43,300 jobs in March.

The fall surprised the market, which had forecast total employment to rise by 15,000 in April, according to the median of 13 economists surveyed by Australia Associated Press (AAP).

Ben Dinte, associate economist at Australia's largest investment bank Macquarie Group, said the April figures showed the overall moderation in employment growth in Australia.

"Following this data, the Reserve Bank of Australia (RBA) probably won't be pushed into a June rate hike, but we still see August as a possibility for a rate hike," Dinte said.

The RBA last raised the cash rate from 4.5 percent to 4.75 percent in November.

Australia's major bank Commonwealth Bank economist James McIntyre said the economy and jobs growth were still strong despite the decrease in total employment in April.

"The fundamentals behind the labor market are relatively strong, perhaps not as strong as late 2010 but it's continuing solid employment gains as we go forward, particularly in those mining regions," he said.

The Commonwealth Bank still expects the next rate hike to be in August, he said.

Editor:Yang Jie |Source: Xinhua

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