Australia’s unemployment rate falls to lowest level since 1974 | Business and Economy

Unemployment figures give Prime Minister Scott Morrison a boost days before a close election.

Australia’s jobless rate has hit its lowest point in nearly 50 years, giving a potential boost to Prime Minister Scott Morrison’s re-election prospects days after a close vote.

The country’s jobless rate stood at 3.9 percent in April, the lowest since 1974, figures from the Australian Bureau of Statistics showed on Thursday.

The strong jobs figures are likely to increase pressure on Australia’s central bank to raise interest rates further after inflation hit a more than two-decade high of 5.1 percent during the first quarter.

The Reserve Bank of Australia earlier this month raised its benchmark interest rate to 0.35 percent from a record low of 0.1 percent.

Many investors expect rates to rise at least 2.5 percent by the end of the year, which will significantly increase the cost of borrowing and the risk of a sharp economic slowdown.

Despite the precipitous drop in unemployment, job growth almost ground to a halt with only about 4,000 new jobs created in April, although that partly reflects a significant decline in part-time work.

Wage growth has also lagged behind inflation, with annual growth in the first quarter only reaching 2.4 percent.

Tim Harcourt, chief economist at the Institute for Public Policy and Governance at the University of Technology Sydney, described the unemployment figures as “impressive” given the pressures facing the global economy, including pandemic-related business disruptions.

“[It] it means that the labor market is better than expected, and then it is a good time for a salary increase,” Harcourt told Al Jazeera.

After trailing the centre-left Labor Party throughout the race, Morrison’s Liberal-National Party coalition has narrowed the gap in the polls ahead of Saturday’s vote.

“We have an economic plan that is working,” Treasurer Josh Frydenberg wrote on Twitter after the unemployment figures were released. “Unemployment is low and our economy is strong.”

The economy has dominated the election campaign, with the rising cost of living in the polls among the top issues of concern for voters. More than 17 million Australians are eligible to vote in the poll, which will choose the next government for a three-year term.

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