An unexpected surge in the number of full-time employees last month is unlikely to stand in the way of an interest rate cut, according to economists.
Government data shows that full-time employment jumped by a seasonally adjusted 10,900 in July.
This was a surprising result, coming after a raft of recent data that show the economy has been slowing sharply.
But economists doubt this will deter the Reserve Bank of Australia from cutting its key cash rate possibly as early as next month and say the jobs surge could be due to fewer people being polled for the employment survey.
The Australian Bureau of Statistics has been forced to cut its labour force sample by 24 per cent because of a cost-cutting exercise in the federal budget.
TD Securities senior strategist Joshua Williamson said, ''We would caution about reading too much into July's labour force result.
''Some of this increase could be unwound in future months as the slowdown spreads.
''Don't forget that August's employment number has got off to a bad start with news that Starbucks will close over 60 Australian stores, while Qantas has announced plans to lay off 1500 workers.''
According to the ABS, the number of people employed last month rose by a seasonally adjusted 53,700, with part-time jobs dropping by 42,800.
The jobless rate was 4.3 per cent, unchanged for the fourth straight month after revisions. Economists had expected total employment to rise by a slim 1300.
Acting Prime Minister Julia Gillard welcomed the jobs result, coming as the economy, she said, was confronting the most difficult global conditions in at least a quarter of a century.
Ms Gillard, also the Employment Minister, said, ''While employment growth is easing as a result of global conditions and eight interest rate rises in just over three years, the fundamentals of the economy remain strong. As we've been saying for some time, Australia is not immune from the global slowdown but we're better placed than other nations to withstand it.''
By contrast, acting Opposition Leader Julie Bishop said the encouraging resilience of the job market could not be taken for granted.
''It is vital that [Prime Minister] Kevin Rudd and [Treasurer] Wayne Swan stop talking down the economy and driving down business and consumer confidence.
''This has been reflected in recent falls in retail turnover and housing finance commitments, slowing residential building approvals and slowing demand for credit.''
Reserve Bank governor Glenn Stevens indicated this week that a rate cut would be on the agenda in coming months against the backdrop of slowing domestic demand.
Despite receiving an initial jolt from the stronger-than-expected jobs numbers, financial markets are still pricing in a cut of one-quarter of a percentage point to the 7.25 per cent cash rate next month.
They are also predicting there will be at least one more move before Christmas.
National Australia Bank senior economist David de Garis said, ''The economy has softened and the scene is still set for a rate cut, and today's data does not change that outlook for monetary policy.''
The big question mark for borrowers is whether commercial banks will quickly pass on any official rate cut to its customers.
Mr Swan urged the banks to do so. AAP