(Bloomberg) -- Australian unemployment climbed higher than expected last month as a larger-than-usual cohort of workers found themselves in-between jobs, clouding the signal from the labor market data.

The jobless rate jumped to 4.1% in April from an upwardly revised 3.9% a month earlier, government data showed Thursday. The economy added 38,500 roles  — driven by part-time jobs — versus a forecast 23,700 gain.

Australia’s monthly employment report has historically been volatile. The jobless rate recorded a significant rise in January, when a large number of workers were similarly waiting to start new jobs, then fell back in February. Still, with interest rates at a 12-year high, unemployment is expected to gradually increase as the economy slows.

Traders are pricing about a 50% chance of a rate cut in December. The yield on policy sensitive three-year bonds fell after the report, extending an earlier decline, and the currency also slid.

The Australian Bureau of Statistics and some economists played down the scale of the increase in the jobless rate.

There were “more people than usual indicating that they had a job that they were waiting to start in,” said Bjorn Jarvis, ABS head of labor statistics. “Recent employment growth is broadly keeping pace with population growth. This suggests that the labor market remains tight.”

Sean Langcake, head of macroeconomic forecasting for Oxford Economics Australia, said the people waiting to start work “will flow into employment next month, putting some downward pressure on the unemployment rate.”

Diana Mousina, deputy chief economist at AMP Ltd., said the data “just follows that messy pattern” at the beginning of the year.

“I’d say pay less attention to the unemployment rate as it’s proving to be a bit too volatile,” she said. “We have, at the moment, about 60,000 people joining the workforce every single month just from the very high levels of immigration.” 

Both the RBA and Treasury predict the jobless rate will rise above 4% — still a low figure for Australia, particularly with rates at restrictive levels.

The RBA has kept its cash rate at 4.35% since late 2023 to tackle consumer price gains. The government, in its budget released Tuesday, announced measures to hasten inflation’s return to the central bank’s 2-3% target, including energy rebates and rent assistance.

First-quarter inflation came in hotter than expected at 3.6%, prompting RBA Governor Michele Bullock to say the board remains vigilant over price pressures. The government, via its budget measures to push down prices, expects inflation to be 2.75% by year’s end.

Thursday’s labor data also showed:

  • Annual jobs growth cooled to 2.8% in April from 3.5% a year earlier
  • Underemployment edged up to 6.6% and underutilization climbed to 10.7%
  • The economy shed 6,100 full-time while adding 44,600 part-time roles
  • The participation rate rose to 66.7%.
  • The employment to population ratio held at 64%

--With assistance from Tomoko Sato and Matthew Burgess.

(Adds comments from economists, updates market reaction.)

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