By James Glynn


SYDNEY--Unemployment in Australia jumped in April as more people searched for work, a rise that's likely to reduce pressure on the Reserve Bank of Australia to raise interest rates further.

The unemployment rate rose to 4.1% in April from 3.9% in March, the Australian Bureau of Statistics said Thursday. Economists had expected the jobless rate to remain steady at 3.9%.

The increase in unemployment came despite the economy adding 38,500 new jobs over the month. That wasn't enough to account for a rise of 68,800 in the number of people seeking employment.

Workforce participation rose to 66.7% in April from 66.6% in March, the ABS said.

The spike in unemployment should be enough for the RBA to put on hold any consideration of a further rise in interest rates, especially as it follows data on Wednesday suggesting that wage growth has peaked.

Overall conditions in the labor market remain tight, but are now more consistent with increasing signs that economic growth has slowed sharply.

The economy grew by just 0.2% in the final three months of last year, but in per-capita terms, growth has been contracting for some time.

The employment-to-population ratio was steady at 64.0% in April, indicating that recent employment growth is broadly keeping pace with population growth. This suggests that the labor market remains tight, though less so than in recent years, the ABS said.

RBA Gov. Michele Bullock said recently the central bank is looking into the reasons why the job market is still performing relatively well despite the slowing of the economy, pointing to the possibility that a shortage of skills has meant firms are retaining their essential workers.

"18 months ago, businesses couldn't hire enough people. They just couldn't find people. So, we think that some of what is going on might be that businesses are only just starting to be able to hire the sorts of people they're looking to hire, so they're only just getting on top of that," Bullock said earlier this month.

The employment data comes after a tumultuous week, with the government on Tuesday forecasting a rapid fall in inflation this year, something that most economists have rejected.


Write to James Glynn at james.glynn@wsj.com; @JamesGlynnWSJ


(END) Dow Jones Newswires

05-15-24 2230ET