Australia's economic resilience continues to surprise with data showing 32,200 new jobs were created in July, sharply raising the possibility that the central bank will increase interest rates before the end of the year.
The labour market expansion - the largest monthly rise since June 2008 - defied expectations of a loss of 20,000 jobs and affirms the Reserve Bank of Australia's decision Tuesday to shift to a neutral policy bias, scrapping any plans to lower interest rates further.
But Deputy Prime Minister Julia Gillard said it was too soon to be considering raising interest rates. "It is too soon to consider pulling the rug out from under" the Australian economy, she told reporters in Melbourne. Unemployment is likely to keep rising, she added.
The unemployment rate remained unchanged at a seasonally-adjusted 5.8% in July from June, the Australian Bureau of Statistics said. Economists had expected a rise to 6.0%.
The economy shed 16,000 full-time jobs in July but created 48,200 part-time positions, the bureau said. The data support the view that employers are doing all they can to retain staff and are reducing hours worked instead of announcing mass layoffs.