The nation's unemployment rate fell 0.1 percentage points (ppt) to 5.5% in May, the lowest level since June 1981. Contributing to the result was a 0.4 ppt decline in the participation rate to 63.5% and a drop in the number of unemployed persons, down 12,800 to 560,500. Offsetting this was a decrease in the number of employed persons, down by 41,100 to 9.655 million. The ABS data shows full-time employment fell by 41,100 while part-time employment rose by 1,500 to 2.759 million. However, Westpac senior economist Andrew Hanlan says that just as no one believed employment jumped by 122,000 in April, no on believes employers have fired a third of those workers a month later. "Employment growth has averaged 18,000 a month over the first half of 2004, down a little from the 20,500 over [the second half of 2003]. These figures are probably a reasonable guide to underlying employment growth," he says. Going forward, Hanlan says the bank anticipates an easing in the pace of underlying employment growth, consistent with the moderation of economic activity. Importantly, he motes that full-time employment has accounted for 64% of jobs created this year, a trend which has supported household incomes and consumer spending. "With white-collar jobs likely to expand, boosted by favourable global growth, we would expect jobs growth to be just sufficient to keep the unemployment rate at relatively low levels," he says. "For the RBA, this is further confirmation that the economy is operating at high capacity utilisation levels - with the unemployment rate at 23-year lows. "With the lack of immediate significant wage and price pressures, there is no urgency for the RBA to move rates," he says.