Australian Employers Added 19,600 Workers in March

April 8 (Bloomberg) -- Australian employers added more workers for the sixth time in seven months in March, underscoring central bank Governor Glenn Stevens’ decision to boost borrowing costs this week and signal further increases.

The number of people employed gained 19,600 from February, the statistics bureau said in Sydney today. The median estimate of 20 economists surveyed by Bloomberg News was for an increase of 20,000. The jobless rate held at 5.3 percent.

Stevens has increased the benchmark lending rate five times in six meetings to prevent a jobs boom from stoking inflation as demand for skilled workers jumps at companies such as BHP Billiton Ltd. and Chevron Corp. Overseas shipments are increasing in value as Chinese demand spurs prices of Australian iron ore and coal.

“The swelling investment pipeline and strong demand for Australia’s key commodity exports mean significant employment gains should be recorded in 2010,” Stephen Walters, chief economist at JPMorgan Chase & Co. in Sydney, said ahead of today’s report.

The number of full-time jobs gained 30,100 in March and part-time employment decreased 10,600, today’s report showed.

Investors are betting there is a 26 percent chance of a quarter-percentage-point increase in the overnight cash rate target to 4.5 percent on May 4, according to Bloomberg calculations based on interbank futures on the Sydney Futures Exchange at 8:52 a.m. The chance of a quarter-point move by early July stands at 100 percent.

Group of 20

Stevens is the only Group of 20 central banker to raise borrowing costs twice this year after leading the world in boosting benchmark rates three times in the fourth quarter of 2009, as evidence mounts that Australia’s economy will strengthen in 2010 after skirting the global recession last year.

The moves have taken the Reserve Bank’s overnight cash rate target to 4.25 percent from a half-century low of 3 percent at the start of October.

“With growth likely to be around trend and inflation close to target over the coming year, it is appropriate for interest rates to be closer to average,” Stevens said on April 6, after boosting the benchmark by a quarter point. The central bank’s target range for inflation is between 2 percent and 3 percent.

Inflation pressures may build as projects such as the A$43 billion ($40 billion) Chevron Corp.-led Gorgon natural gas project in Western Australia increases demand for skilled workers.

Mining Boom

More than A$100 billion of resources projects in Western Australia are likely to generate about 40,000 construction jobs and 12,500 permanent positions, a state government report released last year shows.

“Output growth over the year ahead is likely to exceed that seen last year,” Stevens said this week. “Australia’s terms of trade are rising, adding to incomes and fostering a build-up in investment in the resources sector.”

Australia’s gross domestic product grew 0.9 percent in the fourth quarter from the previous three months, the most in almost two years.

Advertisements for job vacancies jumped 1.8 percent in March, a report published this week by Australia & New Zealand Banking Group Ltd. showed.

Prior to today’s release, government reports showed Australian employers increased payrolls by 197,700 since August, the biggest six-month surge in more than three years.

“The rate of unemployment appears to have peaked at a much lower level than earlier expected,” Stevens said on April 6.

In contrast, the unemployment rate in the U.S. was 9.7 percent in March, and 10 percent in February among European Union countries, the highest rate since August 1998.

Australia’s participation rate, which measures the labor force as a percentage of the population aged over 15, fell to 65.1 percent in March from 65.2 percent, today’s report showed.