Unemployment rate rises to 5.6pc in March, up on-month from 5.4pc New figures show Australia's unemployment rate rose 0.2 per cent to 5.6 per cent in March. THE unemployment rate rose to 5.6 per cent in March, its highest level since September 2009, proving correct economists who urged caution over Februarys stellar jobs rise. The number of jobs in the economy fell 36,100 to 11.593 million people between February and March, pushing up the unemployment rate from 5.4 per cent, the Australian Bureau of Statistics said today. It was the highest jobless rate since September 2009, when unemployment reached 5.7 per cent. The Australian dollar fell to $US1.0517, down from $US1.0537, on the data. Economists had expected a 10,000 fall in jobs and for the unemployment to remain steady. But today they were nevertheless doubtful that the rise in the jobless rate would prompt the Reserve Bank of Australia to cut rates. "We don't see today's labour force data as changing the outlook for monetary policy in any material sense, though if anything, it confirms our view that the labour market remains subdued and the unemployment rate remains under some upward pressure," said Annette Beacher from TD Securities. "There was always the risk of significant "payback" in March," said ANZ economists, pointing out that about half of the 74,000 increase in jobs in February were unwound in March. Macquarie senior economist Brian Redican said the figures showed the jobs market was weakening, possibly due to slower growth in mining investment. Mr Redican said the figures added to the case for further cash rate cuts but that the RBA was unlikely to move on the basis of one month's numbers. "I don't think the RBA is going to panic about it but it certainly goes in the column suggesting further rate cuts may be needed," he said. Mr Redican expects the jobs market to continue to weaken over the coming months, which, he says, would force the RBA to cut rates several more times. We think the RBA will be forced to resume its easing cycle during 2013 and we could the cash rate as low as 2 per cent. The number of people in full-time work fell 7400 to 8.1 million in March, while those in part-time work fell 28,700. ANZ economists said: "In trend terms, employment growth was 12,600 in March but this rate of employment growth is well short of that needed to maintain a steady unemployment rate given the fast rate of population growth currently." The bad news on the jobs front followed yesterday's disappointing drop in consumer confidence in April, suggesting that the recent run of optimistic economic data in Australia may be drying up. The ABS said the workforce participation rate - the proportion of working-age people at work or actively seeking work - fell to 65.1 per cent in March from 65.3 per cent in February. Speaking ahead of the data's release this morning, National Australia Bank's chief economist tipped two rate cuts this year, which would take Australia's official interest rate to an historic low of 2.5 per cent. Alan Oster said that the unemployment rate was key to the movement of the interest rate, with the interest rate falling from current levels if unemployment numbers showed signs of moving significantly higher. The RBA has sat on its hands so far this year, leaving rates at the 3 per cent level they were cut to last November. The central bank has made clear that it was still seeing the impact of the175 basis points-worth of cuts it has made in the 13 months after October 2011. Additional reporting: Andrew Main, AAP, Dow Jones Newswires