Australian employers unexpectedly cut jobs in April as a mining investment boom unwinds and a resilient currency weakens the competitiveness of local industries. The number of people employed fell by 2,900 from a month earlier, compared with economists’ forecasts for a 4,000 gain, government data showed Thursday. The jobless rate rose to 6.2 percent from 6.1 percent.
The central bank reduced interest rates to a record 2 percent this week to help offset the currency’s strength amid predictions that industries outside the resources sector aren’t investing sufficiently to pick up slack in the economy. Australia is on track to grow below its potential rate for six of the past seven years.
The data “supports the RBA’s decision this week to reduce the cash rate,” Aberdeen Asset Management Senior Investment Manager David Choi said in an e-mail. “It points to the continued fragility of the Australian economy. We expect the RBA to cut rates further to boost consumption, in the medium term.”
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