The increase to the unemployment rate in April is a sign that Australia’s tight labour market is finally beginning to loosen, according to Betashares chief economist David Bassanese.

He says overall, the data is a “fairly mixed report” but the unemployment rate is still quite low compared to historical standards.

“Overall, I think what this is showing is that the labour market is starting to lose the capacity to absorb the influx of new workers from high immigration, to the extent it’s been able to over the past year.

“So in that sense, the labour market is weakening a little bit. Jobs aren’t as readily available as they used to be, worker bargaining power is easing more or less in line with what the RBA anticipates, and I hate to say, desires.

“It does think the labour market is too tight, so some gradual softening of the labour market going forward can help reduce inflationary pressure and wages pressures as the RBA expects.

“It lends itself toward the next move in rates being down, rather than up.”