The federal government is talking up the latest jobs figures as a sign of renewed confidence, despite a week of poor sentiment readings among consumers and business.
Global credit rating agency Standard & Poor’s also issued a worrying warning that a slowing Chinese economy poses higher volatility and more risks for the Asia-Pacific region.
As a result it expects Australia’s economic growth rate to remain below three per cent until at least 2017.
The jobless rate eased to 6.2 per cent in August data, released on Thursday, as economists had expected after the surprise jump to 6.3 per cent in July.
The number of people in employment also grew by 17,400, almost three times the size expected.
“We believe that there is a new confidence in the economy that is allowing this employment growth to occur,” Employment Minister Eric Abetz told reporters in Canberra.
Opposition employment spokesman Brendan O’Connor welcomed the “very small” fall in the jobless rate, but said it was higher than at any time during the 2008-2009 global financial crisis.
“Unemployment when there is a six in front of it is never acceptable,” he told reporters in Canberra.
Shadow treasurer Chris Bowen noted that some of the reduction in unemployment came from a reduction in the labour force participation rate of people in and actively seeking employment.
“That is not the way you want to see unemployment coming down, you want to see it coming down by more jobs being created,” he told reporters in Perth.
Before the figures were released Treasurer Joe Hockey warned of some volatility in the unemployment numbers because of increased participation in the workforce after a July 1 change to the government’s jobs services program .
About 40,000 people who previously weren’t looking for work now had to under the $6.8 billion Jobactive program.
“That will increase the workforce participation rate and it will create some volatility in the headline number,” Mr Hockey said.
“But that’s a good sign because we want to take people off welfare.”
In any event, the workforce participation rate eased to 65.0 per cent, having jumped to 65.1 per cent from 64.8 per cent in July.
TD Securities chief Asia-Pacific strategist Annette Beacher said Mr Hockey’s advice would have been useful for explaining the “outsized” jump in participation in last month’s employment report.