Unemployment steady, despite full-time job loss

The unemployment rate has held steady at 5.4 per cent in January, despite a fall in the number of full-time jobs.

Official Bureau of Statistics figures estimate there were 9,800 less full-time positions last month, but this was countered by a 20,200 rise in part-time jobs.

The net 10,400 gain in jobs, combined with a fall in participation, kept the jobless rate steady at 5.4 per cent, with the more stable trend unemployment rate also stuck at 5.4 per cent.

The participation rate - the proportion of people in work or actively looking for it - declined 0.1 of a percentage point to 65 per cent.

That is the same as it was in August last year, and is the joint lowest rate in six years.

Macquarie's senior economist Brian Redican says this decline in the proportion of people looking for work is a sign that jobs are increasingly hard to find.

"We're seeing very weak employment growth ...

but a fall in the participation rate [is] offsetting the unemployment rate, so we're going to get a very slow and gradual rise in the unemployment rate," he told Reuters.

Total monthly hours worked fell by 3.9 million, to 1.62 billion hours in January.

The Australian dollar lost a little ground from 103.3 US cents before the 11:30am (AEDT) release to 103 US cents around 20 minutes later.

Analysts say that is because the detail within the labour force report was a lot weaker than the headline unemployment number.

"The headline numbers weren't too bad, but we would argue that the underlying details are rather soft, full-time jobs have fallen again, that's the third monthly consecutive decline, not a particularly good sign," RBC Capital Markets senior economist Su-Lin Ong told Reuters.

"The broader suite of labour market data is pretty weak overall, so we're looking for the unemployment rate to rise to 5.75 per cent later this year." Brian Redican says that will see the Reserve Bank lower rates further over the coming months, with the next move possibly coming as early as March.

"It's the general weakness of the labour market which is providing strength for the RBA to cut interest rates," he said.

"We think it's becoming increasing clear that a gap is forming in the economy as mining investment peaks and other sectors are unable to step up to the plate."

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