The Australian dollar jumped on Thursday after latest data from the Australian Bureau of Statistics showed the country's August unemployment rate fell to 5.1 per cent from 5.2 per cent in July.
As of 12:38 p.m. in Sydney, the Australian dollar was buying at $1.0219 versus the $1.0180 before the data were released, breaking three days of declines.
Dropping by almost 9,000 between July and August, the total number of jobs baffled economists who expected a rise to 5.3 per cent. Full-time jobs grew by 600.
"It's a 'soft' report," AMP's head of Investment Strategy Shane Oliver was quoted as saying by The Sydney Morning Herald. "It's certainly softer than what the market was going for."
"The unemployment number is totally misleading. It only fell because the participation rate fell, and that's been the story for much of the last year,'' he said.
The participation rate, identified as the share of the population working or available to work, fell to 65.0 per cent from 65.2 per cent. It was the lowest drop since January 2007. Had it not fallen, the unemployment rate would likely have been larger.
"This is an unsustainable way of keeping the rate low," JP Morgan economist Ben Jarman said. "You either have to get the participation rate back, or there is less income circulating around the economy. If there is less income in the economy that's going to turn up in weaker household consumption."
Overall, 622, 600 people have been found unemployed and looking for work, based on the latest monthly jobs report.
"At 5.1 per cent, the unemployment rate is still very low, so the (Reserve Bank of Australia) is not closer to a rate cut after today's data," Spiros Papadopoulos, economist at National Australia Bank told MarketWatch.
"Overall it was a fairly soft monthly labor-force report. The level of employment is back to where it was in April 2012, so no jobs (in net terms) have been created in the past four months," Mr Papadopoulos said.
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