Hockey optimistic on jobs as growth bounds

A surge in economic growth in the first three months of the year has made Joe Hockey optimistic. Source: AAP

JOE Hockey is not taking anything for granted, but a surge in economic growth has made him optimistic about jobs.

The economy expanded by a solid 1.1 per cent during the first three months of the year, lifting the annual growth rate to 3.5 per cent, its fastest pace in about two years.

It's also comfortably above the long-term trend of about 3.25 per cent, a rate that would usually take the pressure off unemployment.

Mr Hockey's budget in May forecast a jobless rate of 6.25 per cent over the coming two years, a figure he says he inherited from Labor.

"I'm cautiously optimistic that we won't get there," the treasurer told reporters in Canberra on Wednesday.

The unemployment rate sits at 5.8 per cent.

A strong economic result in the first three months of the year came on the back of 106,000 new jobs being created, 79,000 of those full time, Mr Hockey said.

The figures also back up the government's economic strategy.

"They prove that our economy is resilient. We have a very solid foundation for future growth," Mr Hockey said.

"But as I've said on many occasions, future growth must be earned."

Mr Hockey was encouraged by signs the expected transition from investment and construction in the resources sector to the non-mining side of the economy was under way.

And his budget growth package would greatly assist the transition, he said.

Exports were the biggest contribution to growth, adding 1.4 percentage points.

Mr Hockey noted this coincided with the extraordinary event that Western Australia in particular was not hit by cyclones in the March quarter.

"Our miners are exporting their socks off ... they dug deep into their inventories," he said.

Business inventories made the biggest detraction from growth, subtracting 0.6 percentage points.

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