Australian job creation far outstripped forecasts in March as unemployment dropped to a one-year low and the number of people in work surpassed its pre-pandemic peak, a big positive for consumer spending and confidence.
Thursday's data from the Australian Bureau of Statistics (ABS) showed 70,700 net new jobs were created in March, double forecasts of a 35,000 gain.
Unemployment dropped to 5.6%, from 5.8% in February, marking a remarkable recovery from the top of 7.5% hit last July when coronavirus lockdowns tipped the economy into recession.
The economy has now recovered all the 878,000 jobs lost to the lockdowns, taking employment up to a record 13.08 million.
Hours worked in March also surged to an all-time high, pointing to strong economic growth for the quarter.
"It suggests that despite repeated brief lockdowns, output is about to surpass its pre-virus level," said Marcel Thieliant, senior Australia economist at Capital Economics. "With the underemployment rate dropping from 8.5% to a seven-year low of 7.9% and job vacancies far above pre-virus levels, we think employment will keep rising."
The latest jump in jobs will please the Reserve Bank of Australia (RBA), which has made full employment a core goal.
The bank has repeatedly emphasized that policy will stay super loose until wages and inflation rise substantially, which will likely require unemployment to fall to 4% or even lower.
One hurdle is the end of the government's JobKeeper support package, which still had around 1.1 million workers on the books at the end of March. Its demise could cost around 100,000 to 150,000 jobs and nudge unemployment up this quarter.
However, demand for labor is running hot with the closely watched ABS measure of vacancies jumping to a record high of 288,700 in the three months to February, a rise of 28.5% on the same period a year earlier.
A survey of business from NAB this week showed conditions were the best in the 26-year history of the series, with employment intentions at a record high.
Consumer confidence rocketed to an 11-year peak, defying concerns over the country's slow vaccine rollout.
Westpac economist Justin Smirk noted the ratio of vacancies to the labor force had jumped to a record 2.1%, from 1.8%.
"This surge suggests significant momentum in employment growth, which is outpacing the rate of growth in the labor force. It has the potential to meaningfully drive unemployment below our current forecast for 5.7% by end 2021," said Smirk.