Australia’s unemployment rate drops to lowest since 1974 | Business and Economy

Jobless figures provide boost to Prime Minister Scott Morrison days out from a closely fought election.

Australia’s unemployment rate has hit its lowest point in almost 50 years, giving a potential boost to Prime Minister Scott Morrison’s reelection prospects days out from a closely fought vote.

The country’s jobless rate stood at 3.9 percent in April, the lowest since 1974, Australian Bureau of Statistics figures showed on Thursday.

The strong employment figures are likely to pressure Australia’s central bank to further raise interest rates after inflation hit a more than two-decade high of 5.1 percent during the first quarter.

The Reserve Bank of Australia earlier this month raised its benchmark interest rate to 0.35 percent, up from a record low of 0.1 percent.

Many investors see rates rising to at least 2.5 percent by the end of the year, significantly raising the cost of borrowing as well as the risk of a sharp economic slowdown.

Despite plummeting unemployment, job growth ground to a near-halt with only about 4,000 new jobs created in April – although that partly reflects a significant decline in part-time work.

Wage growth has also lagged inflation, with annual growth in the first quarter only reaching 2.4 percent.

Tim Harcourt, chief economist at the Institute for Public Policy and Governance at the University of Technology Sydney, described the unemployment figures as “impressive” given the pressures facing the global economy, including pandemic-related trade disruptions.

“[It] means the labour market is better than expected, and it’s a good time then for a wage rise,” Harcourt told Al Jazeera.

After trailing the centre-left Labor Party throughout the race, Morrison’s Liberal-National Party coalition has narrowed the gap in the polls ahead of Saturday’s vote.

“We have an economic plan that is working,” Treasurer Josh Frydenberg wrote on Twitter after the release of the unemployment figures. “Unemployment is low and our economy is strong.”

The economy has dominated the election campaign, with the rising cost of living polling among the top issues of concern for voters. More than 17 million Australians are eligible to vote in the poll, which will elect the next government to a three-year term.