Soft jobs data won't prompt RBA cut

The unemployment rate rose to 6.2pct in April, but economists say it won't be enough to push the RBA into cutting rates again soon.

Centrelink signage at the Yarra branch in Melbourne

Australia's unemployment rate has risen to 6.2 per cent, official figures show. (AAP)

Australia's unemployment rate rose in April, but not enough to prompt the Reserve Bank of Australia to slash interest rates again any time soon, economists say.

In line with market expectations, the jobless rate ticked up 0.1 of a percentage point to 6.2 per cent in April, official data out Thursday showed.

The total number of people with jobs fell 2,900 to 11.7 million in the month, worse than market expectations of a 5,000 lift.

The participation rate, which refers to the number of people either employed or are actively looking for work, was steady at 64.8 per cent.

JP Morgan economist Ben Jarman said April's jobs data represented a "small pullback" after the surprise fall in the unemployment rate to 6.1 per cent in March.

While he described Thursday's figures as a modest disappointment, Mr Jarman did not expect them to cause the RBA to cut the cash rate further in the near term.

The central bank on Tuesday slashed the cash rate by 0.25 percentage points to a new historic low of two per cent, citing continued weak business investment outside the mining sector as a key factor.

"The stability of today's data is consistent with the RBA having moving toward a less explicit easing mentality in their guidance earlier this week," Mr Jarman said.

UBS economist George Tharenou also predicted the RBA to hold rates steady, despite the pick up in the jobless rate.

"Today's softer jobs report does not lead us to rush towards calling an additional easing," he said.

"We continue to see the RBA sitting back and being on hold at two per cent for a prolonged period of time."

According to Thursday's data, people in full-time employment dropped 21,900 to 8.1 million, while those in part-time employment rose 19,000 to 3.6 million.

And those who do have a job are clocking up a record number of hours.

Hours worked in the economy rose by 1.1 per cent in April, to a fresh high of 1.65 billion hours.

HSBC chief economist Paul Bloxham said hours worked were increasing at their fastest annual rate since March 2011, indicating the labour market was tightening.

He said the lift in hours could mean the unemployment rate was "truly past its peak".

But Macquarie senior economist James McIntyre predicted the jobless rate to drift higher this year, probably forcing the RBA to cut rates again.

"We think a period of modest jobs growth is ahead of us," Mr McIntyre said.

"The RBA is going to have to provide some additional push and we see that push later in the year."

On a state-by-state basis, Tasmania has the highest unemployment rate, while resource rich Western Australia's jobless rate is lowest.

STATE BY STATE UNEMPLOYMENT RATES IN APRIL

* Tas - 7.3pct, up from 6.6pct in March

* SA - 7.1, up from 6.4pct

* Qld - 6.7pct, up from 6.6pct

* Vic - 6.2pct, flat

* NSW - 6.0pct, up from 5.9pct

* WA - 5.7pct, up from 5.5 pct


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Source: AAP


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