The room for the Reserve Bank of Australia (RBA) to further cut the overnight cash rate just shrank with the release on Thursday of statistics that the country's unemployment rate unexpectedly went down to 4.9 per cent from 5.2 per cent.

The jobs data is a clear indicator of a turnaround of the Aussie economy which would negate the need for another round of action from the Australian central bank to stimulate the country's economy, analyst said.

Economists forecast the unemployment rate would rise to 5.3 per cent, but the Australian Bureau of Statistics said over 50,000 people found jobs in April. Although full-time employment actually dropped by 11,000 on the fourth month of 2012, 26,000 part-time jobs were created for the same period. The bulk of these new jobs are in Victoria.

"The likelihood of a follow-up near-term rate cut has diminished following the fall in unemployment. The RBA will go back to watching the domestic inflation data and European developments," The Herald Sun quoted Citigroup economist Josh Williamson on Thursday.

"The data suggest an improvement in the economy after a soft patch late last year. I expect the Reserve Bank to be on hold for the rest of the year," The Sydney Morning Herald quoted HSBC economist Paul Bloxham.

However, many economists still believe the Australian central bank would focus on inflation figures and still reduce the key lending rate by at least 25 basis points to 3.5 per cent before September.

Investors, though, are betting a four-in-five chance that the RBA will make another 25-basis points cut on June 5 which would trigger another round of rate reviews by lenders.

Former adviser to Prime Minister Julia Gillard, Stephen Koukoulas, said another rate cut in June appears to have lesser chances.

"Having cut 0.50 points in May, a follow-up 0.25 points in June when there is fresh news showing good growth in employment should see the bank move back to hold, for now at least," The Sydney Morning Herald quoted Mr Koukoulas.

"To be sure, there are still very valid reasons why interest rates are likely to move lower - global economic problems and market ructions. The contraction about to hit the economy from the budget will give the Reserve Bank room. But for now retail sales and employment are so much better than expected that the bank can sit tight," he added.

CommSec economist Savanth Sebastian said the jobs data will boost the confidence of policymakers, households and businesses which would translate into more spending across the economy and more tax receipts for the government.

With the chances of another rate cut becoming more distant, it would provide some relief for lenders which have been criticised for keeping part of the May 1 50-basis points cut to themselves instead of passing it in full to borrowers.

A survey by RateCity, the rate comparison site, noted that only two of 18 lenders passed in full to their customers the RBA rate cut. These are Unicredit WA which decreased its standard variable interest rates by 50 basis points to 6.1 per cent and the Police Credit Union based in New South Wales, which reduced its Police Value Variable Home Loan rate to 6.24 per cent.

Michelle Hutchinson of RateCity observed that Aussie lenders kept on the average 15 basis points.

"The current average rate drop we're seeing so far is 35 basis points, so we're expecting the average standard variable rate across our database to fall below mid-6 per cent when the rest of the home loan market announces rate changes and rates become effective by the end of the month," The Sydney Morning Herald quoted Ms Hutchinson.

ANZ Bank is scheduled to announce the results of its rate review on Friday, May 11. It is expected, like the other big 3, to retain part of the RBA rate cut and cite higher cost of wholesale funding from overseas as the reason behind its decision.

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