Australia economic outlook improves after positive payrolls report

Australian employers boosted full-time payrolls last month by the most in more than 22 years, sending the country's currency higher and underscoring the central bank's shift to a neutral policy stance.

The number of people employed full-time rose by 80,500, the biggest increase since August 1991 and the second-largest on record, the statistics bureau said. Overall employment climbed 47,300 as part-time jobs dropped. The jobless rate held at 6 per cent.

Central bank governor Glenn Stevens reduced the benchmark interest rate by 2.25 percentage points since late 2011 to a record-low 2.5 per cent and signalled a period of steady borrowing costs. The job data and a stronger housing market indicate businesses are beginning to invest in an economy that policymakers predict will accelerate.

"Labour demand has started to heal," said Katrina Ell, an economist at Moody's Analytics. "Improved domestic demand, thanks to earlier rate cuts, is picking up the slack from mining."

The Australian dollar rose to 90.61 US cents in Sydney from 90.16 US cents before the data was released yesterday. Australia's participation rate, a measure of the labour force in proportion to the population, gained to 64.8 per cent in February from a revised 64.6 per cent a month earlier, it showed.

Queensland led the employment gain with 30,700 jobs created last month, while New South Wales added 13,900 workers.