Business

Australian unemployment in surprise pre-election jump

A mine in Western Australia
Image caption Demand for Australian commodities has helped to keep the country's economy out of recession

Australia's unemployment rate rose to 5.3% in July, according to official figures released just ahead of the country's national elections.

About 24,600 more people were out of work, raising the rate from June's 5.1%. Analysts had predicted no change.

The country's Labor government has played on its economic record which saw Australia avoid recession - largely thanks to demand for commodities.

Some observers say the data will hurt the government in the 21 August vote.

However, experts said the unexpected rise may be partly explained by revised population figures which showed there were more people in the potential workforce than previously thought.

The Australian Bureau of Statistics' unemployment data has cut the likelihood of the country's central bank imminently raising interest rates from 4.5%, economists said.

"The unemployment rate is still fairly close to full employment and I still think that it's a fairly enviable position," said Annette Beacher, senior strategist at TD Securities.

"But it does add to the fact that the central bank can sit on hold for a couple of months just to see how these numbers pan out."

Opinion polls give Labor a lead over the opposition - though this has been whittled down, partly due to unhappiness among some voters over the way former Prime Minister Kevin Rudd was ousted by the party.

After a brief honeymoon period, current leader Julia Gillard - Australia's first female prime minister - has struggled to win voter support.

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