The S&P/ASX 200 Index (ASX: XJO) wobbled after the Australian Bureau of Statistics (ABS) released the latest monthly jobs data revealing a 0.1% rise in the unemployment rate to 3.8%.

The benchmark index was trading at 7,638.2 points when the data was released at 11.30am AEST.

The ASX 200 dipped by 0.07% over the next 10 minutes, then went on to rise by 0.18% over the next two hours. The index is currently up 0.61% for the day at 7,651.8 points.

Let's take a look at the numbers.

The ABS said the seasonally adjusted unemployment rate rose to 3.8% in March. Employment fell by 6,600 people and the number of unemployed persons rose by 20,600.

Bjorn Jarvis, ABS head of labour statistics, said the dip in employment followed above-average flows of people into jobs in February and smaller-than-usual flows in both December and January.

However, in March, the flows into employment returned to a more normal pattern, he said.

With the population still growing rapidly due to migration, the fall in employed persons led to the seasonally adjusted employment-to-population ratio dropping 0.2% to 64%.

The participation rate fell 0.1% to 66.6%.

Jarvis said:

The labour market remained relatively tight in March, with an employment-to-population ratio and participation rate still close to their record highs in November 2023.

While they have both fallen by 0.4 percentage points since then, they continue to be much higher than their pre-pandemic levels.

The seasonally adjusted number of hours worked over the month rose by 0.9%.

The underemployment rate fell 0.1% to 6.5%. This is still 2.3% lower than in March 2020 when the pandemic was in its early stages in Australia.

The underutilisation rate, which combines the unemployment and underemployment rates, remained at 10.3%, which is 3.6% lower than in March 2020.

In trend terms, the unemployment rate remained at 3.9% for the fifth consecutive month.

CBA Head of Australian Economics, Gareth Aird, said the labour market was gradually loosening but at a modest pace when compared to below-trend economic growth.

Typically, when central banks increase interest rates to slow the economy, there are more substantial job losses than we are seeing today.

The term "immaculate disinflation" is being bandied about among economists as they marvel at the strength of the jobs market in many Western nations despite slowing economies.

Immaculate disinflation is where inflation returns to target without a major lift in unemployment.

Aird said his team had recently looked into "the apparent 'tension' in the strength of employment growth against very weak GDP growth".

He explained:

"… there is typically a lagged relationship between employment growth and GDP growth.

The upshot is that we remain relatively confident that employment growth will continue to moderate from here.

In turn, that will see the unemployment rate move higher.

Aird said the labour market had never been more flexible and this may be one factor subduing the lift in unemployment.

… the ability for workers to dip in and out of employment is high. The 'gig' economy for example has made it much easier for people to obtain some work even if it's not their preferred place of employment. The upshot is that labour market slack can rise even if it's not reflected in a more meaningful lift in the unemployment rate.

CBA's base case forecast is for unemployment to lift to about 4.5% by the fourth quarter of 2024.

But Aird noted there was a risk that it wouldn't quite reach that level.

Mining and materials shares are leading the ASX 200 higher today.

The S&P/ASX 200 Materials Index (ASX: XMJ) is up 1.2% in the final hour of trading.

Iron ore stocks are rising strongly.

Rio Tinto Ltd (ASX: RIO) shares are up 2.62% and BHP Group Ltd (ASX: BHP) shares are up 1.98%.

The Fortescue Ltd (ASX: FMG) share price has lifted by 1.18%.