Wainwright Marks Management - Australia's rate of unemployment reaches 8-month high

Official data released last week revealed that Australia's jobless rate jumped to its highest point since September last year and analysts at Wainwright Marks Management say the Reserve Bank of Australia may have to consider lowering borrowing costs in order to boost the economy.

In addition to the increasing rate of unemployment, Australia's dollar fell 0.4 percent to reach its weakest since the start of this year.

The recent data has prompted speculation that the Reserve Bank of Australia will reduce interest rates sooner than it had initially intended. Interest rates have been kept steady at a record low 1.5 percent for almost three years and Wainwright Marks Management analysts say the central bank has been relying on the labor market to offset weakness in the economy caused by a downturn in the housing market.

Australia's central bank has stated that further deterioration of the labor market would likely warrant a reduction of interest rates and Wainwright Marks Management analysts say this will likely take place as early as June and not in July as originally planned.

In April, full time work decreased by 6,300 and the overwhelming majority of new jobs created were part time. The rate of joblessness increased for the second consecutive month to reach 5.2 percent. This was a bigger increase than the 5.1 percent that Wainwright Marks Management analysts had predicted.

The recent employment data will prove problematic for Australia's governing party ahead of the country's election.