Unemployment rate at lowest level in nearly 50 years

In April, Australia's unemployment rate was at its lowest level in almost 50 years as firms took more full-time workers, a tightening in the labour market that will cause further hikes in interest rates.

The Australian Bureau of Statistics showed that the unemployment rate held at 3.9 per cent in April, from a downwardly revised 3.9 per cent in March, matching market forecasts.

Employment missed the forecast with an increase of just 4,000, though the big 92,400 gain in full-time jobs was offset by a 88,400 drop in part-time work.

The fall in unemployment will be welcomed by Prime Minister Scott Morrison, who has made jobs the clarion cry of his campaign ahead of what is expected to be a close vote on Saturday.

It also strongly suggests that the Reserve Bank of Australia RBA will lift interest rates in June as it struggles to contain a flare-up of inflation to two-decade highs.

Markets are betting on the central bank's move to 0.60 per cent at its June 7 policy meeting, which is the first since 2011 and it's the first since 2011.

The inflation tide in the world is so strong that investors are wagering that rates will rise to at least 2.5 per cent by the end of the year, even if that threatens to cripple the economy.

The labour market's employment has gone up by 381,500 in the past 12 months and has increased by so far in the past 12 months. There was a correlation between wages and unemployment since 2008, and this rate is close to the lowest since 2008.

The official measure showed that annual growth ticked up only slightly in the first quarter to 2.4 per cent, half of the pace of inflation.

More and more businesses are saying that they have to bump up pay to attract workers, according to surveys of businesses.

The RBA's Board was particularly alarmed when firms were planning to pass on rising input and labour costs to customers, a change from the past decade when fierce competition kept prices low.

Taylor Nugent, an economist at NAB, said that the RBA has returned to a more forward-looking approach to labour costs amid rising inflation, shifting on leading indicators from liaison and the anticipated feed through of the still tightening labour market to wages outcomes.

He believes that the central bank will hike by a quarter point at each of the next three monthly meetings.