Australia's unemployment rate has risen to 3.7 per cent after an estimated 4,300 jobs were lost last month, according to official estimates from the Australian Bureau of Statistics (ABS).
Economists were generally expecting the unemployment rate to remain steady at 3.5 per cent, with the creation of 25,000 jobs.
However, the number of officially unemployed people rose in April, by 18,000, and the participation rate decreased slightly, by 0.1 percentage points, to 66.7 per cent.
ABS head of labour statistics Bjorn Jarvis said the small fall in employment last month followed an average monthly increase of 39,000 jobs in the first three months of the year.
But, he said, despite the small fall in employment last month, the monthly hours worked increased a little, by 2.6 per cent.
"This was because fewer people than usual worked reduced hours over the Easter period," Mr Jarvis said.
"This may reflect more people taking their leave earlier or later than usual, or that some people were unable to, given the high number of vacancies that we're still seeing employers reporting."
Unemployment rate to rise more through the year
Some economists say the labour market is showing signs of cooling, but the rise in hours worked shows there's also some momentum left in the economy.
Adhijit Surya, from Capital Economics, says it's likely the unemployment rate will now overshoot the Reserve Bank's average forecast for the second-quarter, of 3.6 per cent.
He said that, with Wednesday's data showing wage growth remained sluggish in the first three months of this year, it should be enough to keep the RBA from lifting interest rates any higher.
"We expect labour market conditions to continue to slacken ... as economic activity slows sharply," he said.
"Indeed, falling job vacancies point to the unemployment rate continuing to climb higher in the coming months.
"Against this backdrop, we're sticking to our forecast that the unemployment rate will reach 4.4 per cent by year-end, above the 4 per cent the RBA is currently expecting," he said.
Other economists said we'll need a few more months of data to confirm if we're now experiencing a sustained slowdown in economy activity.
Warren Hogan, an Australian macroeconomist, said the data seemed to show "first hints" of slackening in our labour markets.
But he said we'll need a number of months of softer employment "and higher unemployment" to be confident that the RBA's inflation forecasts were on track.
AMP's Diana Mousina said the Reserve Bank should feel less pressure to raise rates after seeing these data.
"Today's soft employment figures along with the wage price data yesterday, which confirmed that Australia does not face a wage breakout problem, which means that there is no urgency for the RBA to lift the cash rate at its next meeting in June," she said.
"The central bank has previously spoken about wanting to preserve the job gains it made during the pandemic, so if that remains the case then it should prefer to hold the cash rate steady for now and assess if further rate rises are necessary."
The RBA Board's next meeting is on 6 June.
Signs of slackening in the labour market?
The data seem to shows that participation in the labour market has topped out near record high levels and isn't getting any higher.
The "employment-to-population ratio", which provides a measure of employment relative to the size of the working-age population (aged 15 and over), shows how much demand there is for workers generally from the pool of people who are old enough to be working.
It hit a record high in June last year, and in trend terms has been ever-so-slowly edging downwards since October.
The participation rate is also showing signs of having topped out.
"Labour demand, while still elevated, is cooling," wrote CBA economist Stephen Wu.
"Several measures of online job advertisements have declined in recent months, and the number of applicants per job ad has increased.
"Today’s data, which showed the unemployment rate lifting to 3.7 per cent, adds further evidence to our view that we are past the peak tightness in the labour market.
"Cooling household spending and strong labour supply growth will likely put further pressure on the unemployment rate over the period ahead," he said.
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