Jobs growth surges as August unemployment rate holds steady at 5.6pc

Australia added 54,200 new jobs in August, well above forecasts, as the unemployment rate held steady at 5.6pc.

A Centrelink office near Brisbane. Pic: AAP

Australia added 54,200 new jobs in August, well above market expectations, cementing a strong uptrend over the last six months.

The Aussie dollar surged on the news, rising 0.3 per cent to US80.09 cents.

The country’s unemployment rate was unchanged at a seasonally adjusted 5.6 per cent in August, as more people entered the job market.

Economists surveyed ahead of the release had expected a steady jobless rate, predicting the economy would add 20,000 jobs in the month.

The number of people in full-time work rose 40,100, while those in part-time work rose 14,100, the Australian Bureau of Statistics said.

The workforce participation rate rose to 65.3 per cent in August from 65.1 per cent in July.

Australia’s job market has been a bright spot for much of this year, with full-time job creation leading an acceleration in hiring, and lowering the jobless rate.

“This is a good news story ... our wage growth will eventually pick up as well,” Deloitte Access Economics economist Chris Richardson said.

Australian Chamber of Commerce and Industry boss James Pearson agreed. “We have seen profitability start to rise, we have seen underemployment get soaked up because firms are in a position to offer their workers more hours,” he told reporters in Canberra.

But for this to continue it will depend on profitability being sustained, productivity lifting and wage increases being affordable.

Mr Pearson also issued a plea to the Turnbull government “We need policy certainty on energy,” he said.

Still, Australia faces a big problem of underemployment and flat wages growth, which is holding done consumer confidence. Underemployment decreased by 0.2 points to 8.6 per cent in August from July.

The economy is still a long way from achieving full employment, estimated by the Reserve Bank of Australia at around 5.0 per cent.

The RBA has kept its benchmark interest rate on hold at 1.5 per cent for over a year, and is not expected to come off the sidelines until next year at the earliest.

Dow Jones Newswires, AAP