World Economy

Australia adds 42,000 jobs in May, flying past 10,000 estimated

Key Points
  • Australia added 42,000 jobs in May, way above 10,000 expected
  • Central bank held cash rate at record low of 1.5% at last meeting
A woman holds an umbrella as a cyclist rides nearby on a rainy day in the central business district (CBD) of Sydney, Australia, March 7, 2017.
David Gray | Reuters

Australia added a whopping 42,000 jobs in May, flying past the 10,000 additions that analysts in a Reuters poll estimated, the Australian Bureau of Statistics said Thursday.

Unemployment rate for May was at 5.5 percent, also coming in lower than the projected 5.7 percent.

The Australian dollar strengthened following the release of the country's latest employment data at 9:30 HK/SIN, trading 0.5 percent higher against the greenback.

Australia's employment figures have traditionally been volatile but the trend in recent months has pointed to an improvement in the labor market, Steven Milch, chief economist at Suncorp, told CNBC's "Squawk Box."

"It's certainly strong. It's the third consecutive month of strong numbers, stronger than what we were expecting," he said.

Australia jobs beat expectations, again
Australia jobs beat expectations, again

Milch added that if the trend continues, wages should also pick up — reinforcing the Reserve Bank of Australia's "glass half full" view of the economy. That means that the central bank is unlikely to change its policy anytime soon, he said.

The RBA had said in a statement earlier this month that "indicators of the labour market remain mixed." The central bank kept its benchmark cash rate at a record low of 1.5 percent and noted that slow growth in real wages is restraining growth in household consumption.