Jobless rate for February could tick up

A weakening labour market will be read as a sign the Reserve Bank could cut official interest rates.
A weakening labour market will be read as a sign the Reserve Bank could cut official interest rates.

Australia's unemployment rate is expected to tick slightly up when official figures for February are released on Thursday.

A weakening labour market will be read as a sign the Reserve Bank could cut official interest rates, which currently sit at 1.5 per cent.

The RBA said in its board minutes released on Tuesday that employment growth is likely to remain above average, but some recent indicators had "turned down a little".

Westpac's Justin Smirk said indicators including the Westpac Jobs Index, ANZ Job Ads and Westpac-Melbourne Institute Unemployment Expectations had softened but were not pointing to a collapse in employment at this stage.

"We believe that employment growth is set to stall through the first half of 2019, in part due to uncertainty surrounding the April federal election but also some payback for the earlier strength in the labour market," he said in an analysis.

Westpac has forecast a 5000 job drop for February, which based on a participation rate of 65.7 per cent would push up the unemployment rate to 5.1 per cent.

CommSec's Ryan Felsman said internet job vacancies - a leading indicator of the jobs market - had suffered their biggest fall in more than three years.

"Skilled internet job vacancies point to a weakening in jobs growth momentum," he said.

Australian Associated Press