The unemployment rate in Canberra has increased for the first time since September despite the national unemployment rate remaining steady, figures issued by the Australian Bureau of Statistics reveal.
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The ACT unemployment rate rose by 0.1 of a percentage point to 3.6 per cent in trend terms in April. The latest report says it was the first increase in the ACT's jobless rate since September last year when it hit 4.1 per cent.
Meanwhile, employment rose nationally for a fourth straight month in April, supporting the Reserve Bank of Australia’s view that the jobless rate might be close to peaking and could bring forward the timing of rate hikes.
Companies and employers added 14,200 jobs – almost twice as many as forecast – from March, when payrolls gained by an upwardly revised 22,000. The seasonally adjusted jobless rate held at 5.8 per cent.
Canberra Business Council chief executive Chris Faulks said it had been a surprise to everyone that Canberra’s unemployment rate had remained so low, despite 18 months of turmoil in government jobs.
"Canberra’s falling unemployment rate has been at odds with the news of cuts to the public service for the past six months," she said.
Ms Faulks said it was difficult to make a judgment based on one month, but it appeared the unemployment rate in Canberra might be beginning to match the narrative of budget cuts.
"The federal budget on Tuesday next week will be hard and will inevitably further impact the unemployment figures in Canberra," she said.
"We still don’t know exactly what will be in the budget but we’re pretty confident that there is a different environment in Canberra than there was in 1996 and that our economy has strengthened since then.”
She said the impact of the budget might be alleviated by the private sector if it was able to provide jobs for those in the public service who faced job cuts.
ACT Chamber of Commerce and Industry chief executive officer Andrew Blyth said the ACT economy was volatile but he expected the federal budget would have less of an impact on unemployment than it did in 1996.
"We’ve seen unemployment levels hold their own for some months now despite there being 18 months of job cuts at the federal level," he said. "That’s in no small part due to the diversification of the economy and the greater private-sector presence."
Commonwealth Bank economist Michael Blythe said the labour market was confirming earlier signs of a peak in the unemployment rate and upturn in jobs growth.
"It reinforces the RBA's shift to a neutral bias, and a trend if it continues that will see them towards a tightening bias," Mr Blythe said.
"We have had a rate rise pencilled in for November for a while, and this indication of a peaking in unemployment is consistent with that."
The upbeat jobs data also comes just two days after the Reserve Bank’s May interest rate meeting, at which governor Glenn Stevens conspicuously dropped warnings the jobless rate would continue rising.
The bank, which publishes revised economic forecasts on Friday, has long maintained unemployment would peak above 6 per cent and remain around that level well into next year.
- with Jacob Greber
