Australia’s unemployment rate fell 0.1 percentage point to 4 per cent in May, in line with expectations.

Over the month, 39,700 jobs were added to the economy, according to the Australian Bureau of Statistics.

This is a little higher than the 30,000 employment lift pencilled in by forecasters.

“With employment rising by around 40,000 people and the number of unemployed falling by 9,000 people, the unemployment rate fell to 4 per cent,” the bureau’s head of labour statistics Bjorn Jarvis said.

The jobless rate was expected to fall again following more people than usual waiting to start work in the month before.

Jarvis said people starting or returning to their jobs in May explained some of the fall in unemployment and rise in employment.

The participation rate stayed at 66.8 per cent.

The jobless rate was broadly expected to fall back to 4 per cent from 4.1 per cent over the month, and consensus was for a 30,000 employment lift.

Australia’s job market has remained a bright spot in an otherwise bleak economy under pressure from higher interest rates and elevated inflation.

Even as the economy slows, which is an expected consequence of the Reserve Bank of Australia’s series of interest rate hikes, the unemployment rate has been holding at below average levels and jobs growth has been strong.

The central bank, which meets for its June interest rate decision next week, expects the labour market to weaken gradually, although it is tolerating a lengthy timeline to bring inflation back to target to preserve gains in employment.

– AAP