Jobs data trims rate cut odds: economists

AAP, with a staff reporter

Further interest rates cuts appear less likely following another surprise surge in employment for April, according to analysts

Australia's unemployment rate fell to 5.5 per cent in April, with the total number of people with jobs rising by 50,100, Australian Bureau of Statistics data shows.

HSBC Australia chief economist Paul Bloxham said the figures suggested the jobs market was improving and the Reserve Bank of Australia might not need to cut the cash rate again.

The positive result came after a fall of more than 30,000 in total employment in March and a rise of more than 70,000 in February.

Economists had expected the unemployment rate to remain steady in April, tipping employment to grow by 11,000.

"Obviously the numbers have been very volatile in recent months but if you look through that at the trend, employment does look as though its been improving since the beginning of the year," Mr Bloxham said.

"So we're still of the view that the slump in growth may be behind us and the RBA may not need to cut again."

The RBA cut the cash rate a quarter of a percentage point to 2.75 per cent on Tuesday.

St George chief economist Hans Kunnen said the figures show that employment growth is trending higher.

"The previous rate cuts appear to be having an impact on certain areas of the economy," he said. "There will be doubters and early forecasts for next month will be minus 20,000 or something like that.

"If you average out the volatility you'll have reasonable jobs growth."

However, Mr Kunnen said the big rise in employment won't impact the RBA's future decisions on whether to cut the cash rate or not.

He said the central bank board will instead be closely watching the March quarter business investment figures that are out on May 30.

"If they are weak then the Reserve Bank will use more of that scope (to cut) that they have," he said.

CommSec chief economist Craig James said that as more good economic data was released, the RBA would probably keep the cash rate unchanged over the next few months after cutting it on Tuesday.

"Reserve Bank board members probably winced when they heard the job numbers," he said.

"In addition, data out next Monday may show an eight per cent lift in new home loans being written during March. And our early forecast for March quarter economic growth is for a gain of 1.4 per cent."

Mr James said the job market was in good shape, even though it was not as strong as it was a year ago.

"The jobless rate remains well below six per cent - a level that it has held below for almost a decade," he said.

"The last time that the jobless rate remained below six per cent for an extended period was in the 1970s.

"Clearly, this is a result to be celebrated."