Australia's unemployment rate eased at 4.9 percent in May as some 7,800 were employed raising the total to 11.445 million, the Australian Bureau of Statistics (ABS) announced on Thursday. Nevertheless, the type of jobs created by the economy has been eroded with lesser full-time jobs and more part-time work offered to residents.

The average economist forecast was for a 25,000-strong rise, according to a survey of 25 market analysts by Bloomberg.

The increase in employment was driven by an increase in part-time employment, higher at 29,800 to 3,413,500 and was offset by a decrease in full-time employment, which was down 22,000 to 8,027,100.

The number of people unemployed increased by 8,900 people to 592,800 in May. The ABS monthly aggregate hours worked series showed an increase in May, up 6.4 million hours to 1,601.1 million hours.

Labour force participation rate, the proportion of people in work or looking for work, in May was unchanged from April at 65.6 percent.

Commonwealth Bank economist James McIntyre said this is worrying as it is still below the record high of 65.9 percent seen in October.

“If we don’t get enough supply in the labour market then we’ll see that rationing of demand in the labour market and that means wages growth and that will feed through to inflation, which the RBA will be looking to keep in check,” he said.

Aussie dollar falls as unemployment data disappoints

The Australian dollar reversed earlier gains as currency traders lowered their bets on further interest rate rises. The RBA on June 7 held interest rates unchanged and said current policy settings are appropriate.

The Aussie slumped to $1.0570 as of 12:18 p.m. in Sydney from $1.0623 in New York yesterday.

Against the yen, the local dollar dropped to 84.62, compared to yesterday's close of 84.90. The next downside target level for the Australian currency is seen at 83.00.

The Aussie also touched a fresh multi-month low of 1.2869 against the Kiwi, compared to yesterday's closing value of 1.3043.

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