Expectations of a May interest rate cut have been undermined by signs that Australia’s jobs market is healthier than previously thought.

More than 44,000 jobs were created across the nation in March, the Australian Bureau of Statistics said on Thursday, keeping the unemployment rate steady at 5.2 per cent once population growth was factored in.

That was well above economists’ expectations that 5,000 jobs would have been added to the economy for the month and marked a sharp turnaround from February when more than 15,000 jobs were lost.

Economists are divided over how the better-than-expected data will affect the chances of an interest rate cut in May.

The Reserve Bank of Australia opted to keep the cash rate on hold at 4.25 per cent in April but flagged a likely rate cut next month.

While noting that the economy was underperforming, which suggests a lower cash rate is needed, the RBA indicated it would only cut the rate if consumer price index (CPI) data, to be released later this month, showed underlying inflation remained subdued.

However, some economists warn the latest jobs data could undermine the case for a rate cut.

RBC senior economist Su-Lin Ong said the data could help ease pressure on the RBA.

“A number like this probably provides the market with a reminder that rate cuts aren’t a done deal,” she said.

Nomura rates strategist Martin Whetton agreed.

“On the basis of this data, we wouldn’t expect that the RBA would find slack in the economy that’s going to lead through to lower inflation,” he said.

However, HSBC Australia chief economist Paul Bloxham believed the RBA would be more interested in inflation data than the unemployment rate.

“I think if the CPI numbers are low enough, the RBA will still feel that they can cut rates from here,” Mr Bloxham said.