The Australian dollar got some support from the strong data and was last up 0.1% at $0.6435, while three-year government bond yields extended an earlier rise to be up 6 basis points at 3.669%, the highest since early April.

Investors remain confident the Reserve Bank of Australia will cut rates by a quarter point to 3.85% next Tuesday due to cooling inflation at home and global uncertainty caused by U.S. tariff policies.

Beyond that, they have been scaling back expectations and now see around 75 basis points of easing by year-end, compared to more than 100 basis points a couple of weeks ago, in part due to the tariff truce between the United States and China.

"We don’t see this strong labour landscape as a hindrance to more rate cuts...That being said, this rate cut cycle will be shallow," said My Bui, an economist at AMP.

"The Australian labour market has been very resilient throughout the past year, with unemployment rate hovering just above 4% and solid jobs growth."

Figures from the Australian Bureau of Statistics showed net employment jumped 89,000 in April from March, when they rose an upwardly revised 36,400. That was far above market forecasts for a 20,000 rise and the biggest monthly increase in over a year.

The monthly gain was driven by full-time jobs, with a surge of 65,000 in female employment.

The jobless rate held at 4.1%, as expected, as the participation rate climbed back to near record highs at 67.1%, showing the supply of labour was meeting strong demand.

Despite the strength in employment, hours worked were unchanged, after two months of falls.

GRADUAL CUTS

The RBA held rates steady at 4.1% in April but opened the door to a rate cut by stating that the meeting in May would be an opportunity to revisit monetary policy settings.

Global tariff risks and a disappointing recovery in consumer spending have clouded the economic outlook for Australia but the labour market has so far proven resilient.

The unemployment rate remains low and job advertisements are stabilising above pre-COVID levels. Wages have been well-behaved, with growth in the private sector mostly subdued.

The central bank is not expecting further loosening in the labour market, tipping unemployment to peak at 4.2% this cycle.

Analysts at TD Securities expect the RBA to cut rates next week, and then go slow and steady in delivering further policy easing.

"Our current forecast is for the RBA to deliver two further 25bps cuts, in May and in August. We continue to believe it's highly unlikely the bank delivers cuts in between SoMP meetings given the outlook for tariffs is nowhere as dire as it was a few weeks back."

Headline consumer price inflation held at 2.4% in the first quarter and a key trimmed mean measure of core inflation slowed to 2.9%, taking it back into the RBA's target band of 2% to 3% for the first time since late 2021.

The RBA has been concerned that some other measures of broad labour costs have been running hot while productivity has been disappointingly weak, a combination that could threaten progress made on taming inflation.