Which shares will benefit from Australia’s low unemployment?

The Australian Bureau of Statistic released employment data today which showed the Australian economy added 26,100 jobs in March. This brought the unemployment rate down to 5.7%, which is the lowest level since 2013.

A further 20,000 jobs are expected to be added in April, which should prove to be a further boost to the economy.

When unemployment levels drop it can push wages higher, which can then lead to increasing levels of disposable income. This will be music to the ears of many companies listed on the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO), but not all of them.

Research has shown that many consumers currently have a preference for spending their money on technology and food, rather than apparel.

This doesn’t necessarily help the likes of Myer Holdings Ltd (ASX: MYR), but I would expect retailers such as Harvey Norman Holdings Limited (ASX: HVN) and JB Hi-Fi Limited (ASX: JBH) to benefit from any rise in disposable income. The wide range of electronics that both companies stock should be able to satisfy the needs of consumers.

Also, consumer discretionary shares such as Domino’s Pizza Enterprises Ltd. (ASX: DMP) and Retail Food Group Limited (ASX: RFG) are likely to get a boost from the lower unemployment levels. These two companies have an incredibly strong presence thanks to their extensive store network, and would be very likely to capture any increases in consumer spending.

It isn’t all good news though I’m afraid. The data released today was positive enough for many to now rule out a cut to the cash rate by the Reserve Bank at its next meeting in early May.

This could also result in the Australian dollar remaining at its current level for a little while to come, or even continuing to push higher.

If you are still looking for more investment ideas then look no further than these fantastic three shares. Our dividend expert has just picked them out, so get them before they go absolutely gangbusters!

The Motley Fool's renowned dividend investing guru recently revealed his newest dividend buy recommendation and short list of 3 Best Dividend Buys Now. Which means if you're reading this message right now, you're not on the list to uncover their names before they potentially go gangbusters. Simply click here to learn more about these shares.

Motley Fool contributor James Mickleboro has no position in any stocks mentioned. The Motley Fool Australia owns shares of Retail Food Group Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss a very important event! Chief Investment Advisor Scott Phillips and his team at Motley Fool Share Advisor are about to reveal their latest official stock recommendation. The premium “buy alert” will be unveiled to members and you can be among the first to act on the tip.

Don’t let this opportunity pass you by – this is your chance to get in early!

Simply enter your email now to find out how you can get instant access.

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our Financial Services Guide (FSG) for more information.