Beating expectations: Analysts were predicting around 15,000 jobs to be added to the economy. Photo: Gabriele Charotte
More than 80,000 full-time jobs were added to the economy last month, the highest gain in 22 years and the second highest monthly growth on record.
But the unemployment rate remained stable at a decade-high of 6 per cent, according to data released by the Australian Bureau of Statistics on Thursday.
A total of 47,300 jobs were added to the economy in February, the strongest monthly rise in almost two years. A total of 80,500 full-time roles were added and 33,300 part-time positions removed. The participation rate jumped to 64.8 per cent from 64.6 per cent.
The Australian dollar surged on the news, rising by over half a cent to 90.76 US cents at 11.33am AEDT.
"The labour market is on the mend," Moody's Analytics associate economist Katrina Ell said.
"Encouragingly, there was outsized growth in full-positions, reversing the trend of the past year or so. Recent gains in the forward indicators are flowing through to the hard data."
In unrounded estimates, the unemployment rate edged up to 6.047 per cent in February from 5.995 per cent in January.
Prime Minister Tony Abbott said the jobless rate, which is at its highest in a decade, was "much higher than we would like it and plainly if we want to see more people employed we have got to get taxes down".
Sharp jump in full-time jobs
The number of full-time positions added in February was the second-highest ever recorded in this Bureau of Statistics data series, which started in 1978. The highest gain was in August 1991, when 87,000 jobs were added, JP Morgan economist Tom Kennedy said.
The surprise jump in full-time jobs came as supermarket giant Woolworths promised new jobs across Australia at its stores, weeks after a series of manufacturing closures this year that has seen thousands put out of work.
Woolworths said it would open 108 new stores in 2014 and 2015 to create 6981 jobs. Last week, Coles said it would build 70 new supermarkets and create more than 16,000 jobs.
While February's data was good, it was too early to tell if the labour market had reached a turning point, Mr Kennedy said.
"One month clearly doesn't make a trend. It's a little bit out of sync with the other indicators of the economy.
"We are still tracking sub-trend [growth] for job ads, we saw the unemployment index in the NAB business survey on Tuesday give back a lot of the gains. It still looks like things are a little bit soggy out there."
The aggregate monthly hours worked decreased 14.0 million hours to 1,608.9 million hours. The employment to population ratio increased by 0.2 percentage points to a seasonally adjusted 60.9 per cent.
Economists had expected the unemployment rate to remain at 6 per cent in February, with 15,000 jobs added to the economy.
State by state
NSW had the lowest unemployment rate in February at an unchanged 5.8 per cent, after Western Australia recorded a sharp jump in the jobless rate from 5.2 per cent to 5.9 per cent.
The mining powerhouse's 1.7 percentage point rise since November equates to a 42 per cent increase in the number of jobless in that state over the same period.
Victoria's jobless rate remained stable at a seasonally adjusted 6.4 per cent as Queensland and South Australia both edged up by 0.1 percentage pints to 6.2 per cent and 6.7 per cent respectively. Tasmania's unemployment rate slipped by 0.2 percentage points to 7.3 per cent.
In trend terms, the jobless rate fell by 0.2 percentage points to 3.7 per cent in the Northern Territory and 3.4 per cent in the ACT.
Men benefited from the increase in jobs while the total number of women in employment fell in seasonally adjusted terms.
"It was males that bore the greater part of the weakness in the labour market last year, so the fact that male employment has picked up in the first two months of this year is a potentially positive sign that the worst is behind us," Citi economists Paul Brennan and Josh Williamson said.
Impact on interest rates?
Analysts said the February data was in line with the Reserve Bank's outlook for the economy. The central bank expects the unemployment rate to edge higher, possibly peaking by the end of this year or in early 2015, as the economy adjusts to lower levels of mining investment.
"While this report is certainly upbeat, the unemployment rate at 6.0 per cent and annual employment growth at a tepid 0.6 per cent [year-on-year] remain within the bounds of current RBA thinking," TD Securities head of Asia-Pacific research Annette Beacher said.
"With GDP expected to reach at least 3 per cent growth this year, we expect employment growth to follow. However, even a return to 1.5 per cent [year-on-year] employment growth by year-end guarantee an unemployment rate below 6 per cent."
Financial markets priced in a 64 per cent of a 25 basis points rise in interest rates within the next 12 months. Markets had been pricing in a 36 per cent chance of a hike before the jobs data was released.
Consumers worried about jobs security
The latest figures came as a survey released on Wednesday showed that Australian consumers were increasingly worried about their jobs and the economic outlook as consumer confidence slumped to its lowest levels since May.
Westpac and the Melbourne Institute's consumer confidence survey fell to its lowest levels since May last year and is now 10 per cent lower than its post-election peak reached in November.
Economists said consumer confidence had taken a beating on the run of 'bad news' around the motor vehicle industry, other manufacturers and Qantas has clearly rattled consumers,
There was a "a severe loss of confidence around job security", Westpac senior economist Matthew Hassan said.
with Eli Greenblat