Australia’s record unemployment rate has added to concern over inflation.
The national unemployment rate reached a 33-year low of just under 4 per cent in February.
Among the states, Western Australia had the lowest rate with 2.8 per cent – the equal lowest rate the state has ever achieved.
CommSec equities economist Savanth Sebastion said the new entrants to the working world increased spending power in the economy, while those currently employed would feel a level of added confidence to spend.
While this will have a positive effect on retail sales and housing demand, increased expenditure will also lead to a risk of pricing inflation and further interest rate hikes.
Mr Sebastion said the strength and continued growth in Asia was helping shield the Australian labour market from the recession fears reverberating in the US.
“Many people still can’t get their heads around the fact that demographic factors are at work as well as economic.
There is no reason why low unemployment rates can’t be maintained,” Mr Sebastion said.
WA’s unemployment rate of 2.8 per cent was significantly lower than the national average of 4 per cent and better than any other state for the eighth month in a row.
There are now more than 1.13 million people in either full time or part-time work in WA, making it the best state for participation levels.
Employment Protection Minister Jon Ford said the latest figures highlighted the buoyant nature of the WA economy and confirmed its status as a powerhouse.
“It is also encouraging to know that participation rates remain at record levels, the highest in Australia, making the west the easiest state in Australia in which to get a job,” Mr Ford said.
Federal Treasurer Wayne Swan said the employment numbers were a cause for celebration, but productivity needed to improve if jobs growth was to be maintained.
”If we want to continue to have strong jobs growth, we have got to control inflation, we have got to lift our productivity,” Mr Swan told parliament.
“We can have strong growth if we lift our productivity and control inflation, and that’s what we on this side of the house are doing.
“It means fighting inflation, it means investing in the productive drivers of growth, it means dealing with the skills shortages.”