SYDNEY - Australian employment increased four times as much as expected in May, worsening a labour shortage that may force the central bank to raise interest rates to ward off inflation. The Australian dollar climbed.
Employment rose 39,400 after gaining 34,900 in April. The jobless rate dropped to4.2 per cent, the lowest in almost 33 years, the Australian Bureau of Statistics (ABS) said.
The median estimate of 24 economists in a Bloomberg News survey was for 10,000 extra jobs and an unchanged jobless rate of 4.4 per cent.
Traders pushed up the yield on interest-rate futures, bringing forward their expectation for a lift in borrowing costs to August from December.
The jobs boom, and a report on Wednesday showing the economy is growing at its fastest pace in three years, add to pressure on the central bank to raise its benchmark rate, already at a six-year high of 6.25 per cent.
"After the GDP numbers yesterday, this increases pressure for the Reserve Bank of Australia," said Brian Redican, a senior economist at Macquarie Bank in Sydney.
The Australian dollar bought US84.64c, close to an 18-year high, from US84.39c immediately before the report was released.
The number of full-time jobs rose 66,800 in May, yesterday's report showed. Part-time employment dropped 27,400.
Economists say new methodology used by the ABS in compiling the data could have affected the jobless reading.
