The Australian Bureau of Statistics (ABS) has reported that Australia’s unemployment rate reached 3.9 per cent during April, the lowest rate since 1974.

According to the ABS, employment increased by 4,000 people during the month while unemployment decreased by 11,000.

“The unemployment rate decreased slightly in April, though remained level, in rounded terms, with the revised March rate of 3.9 per cent,” said ABS head of labour statistics Bjorn Jarvis.

“3.9 per cent is the lowest the unemployment rate has been in the monthly survey. The last time the unemployment rate was lower than this was in August 1974, when the survey was quarterly.”

Meanwhile, the participation rate decreased to 66.3 per cent, just below its record high level of 66.4 percent seen in February and March.

The ABS also reported a fall in the underemployment rate by 0.2 percentage points to 6.1 per cent and a 0.3 point decline in the under-utilisation rate to 10.0 per cent.

Along with Wednesday’s wages data, economists indicated that unemployment would be a critical factor in the Reserve Bank’s (RBA) June interest rate decision, with general consensus pointing to a hike of 25 basis points to 0.6 per cent.

In its latest statement on monetary policy, the central bank predicted that unemployment would average 3.8 per cent during the June quarter and 3.7 per cent in the December quarter.

“The level of job vacancies is very high, at a time when the participation rate and the ratio of employment to working-age population are already at historical highs,” the RBA said.

“The unemployment rate is therefore forecast to decline further, to around 3.5 per cent in early 2023. This would be its lowest level in almost 50 years.”