(Bloomberg) -- Australia’s unemployment rate fell further in March -- even as labor force participation surged to a record -- as strengthening sentiment combined with record low interest rates accelerate the economy’s recovery.The jobless rate dropped to 5.6% from 5.8% in February versus economists’ median estimate of 5.7%, data from the statistics bureau showed Thursday in Sydney. Employment soared by 70,700 in March, double the expected 35,000 gain. The participation rate climbed to 66.3%, also exceeding economists forecast of 66.1%, and the highest on data going back to 1978.“Employment and hours worked in March 2021 were both higher than March 2020, up by 0.6% and 1.2%,” Bjorn Jarvis, head of labor statistics at the ABS, said in a statement. “The proportion of women employed was the highest it’s ever been.”The Australian dollar jumped on the released before trading at 77.22 U.S. cents at 12:17 p.m. in Sydney.The economy is booming Down Under with sentiment surging as cashed-up households are encouraged to spend and firms consider investing. That’s prompted increased hiring and Australians to resume job-hunting, swelling the labor force and further strengthening the economic outlook.The Reserve Bank of Australia in February doubled its quantitative easing program to A$200 billion ($155 billion) and reiterated that it doesn’t expect to increase interest rates until 2024 at the earliest. Governor Philip Lowe, in a speech last month, said the economy could probably manage unemployment in the low 4s, or potentially even the 3s, before stoking inflation.“Across the states, Western Australia and Queensland led the increase in employment, with both states now operating well above their pre-Covid levels,” said Sarah Hunter, chief economist for BIS Oxford Economics. “The recovery in mining investment and in Queensland’s case an increase in interstate migration have resulted in their economies out-performing.”Among other details in today’s jobs report:Monthly hours worked increased by 2.2%Under-employment decreased by 0.6 percentage point to 7.9%, the lowest level in seven years, and under-utilization dropped by 0.8 percentage point to 13.5%Full-time jobs fell by 20,800 and part-time roles soared by 91,500Western Australia state’s recovery from a lockdown in the first week of February was reflected in a 2.4% increase in employment, and a 9.2% increase in hours workedWestern Australia, which shut its borders from the rest of the country for an extended period during 2020, recorded an unemployment rate of just 4.8% -- the lowest in Australia. This was despite the participation rate surging to 68.4%, more than 2 percentage points above the national level.The central bank’s February forecasts show the jobless rate falling to around 6% by the end of this year -- a level already bested -- and 5.5% at the end of 2022. Under an optimistic scenario for unemployment, the rate would drop to 4.75% by the end of next year. The RBA is due to release updated forecasts next month.The March 28 expiry of the government’s wage-subsidy JobKeeper program, designed to keep workers attached to their employers, could disrupt the labor market’s stellar run. Treasury estimated the program’s conclusion could see up to 150,000 jobs lost.The ABS said today that the labor force data was collected during the first half of March, prior to the end of JobKeeper.Meantime, sentiment reports this week showed an index of business conditions soared to a record high -- with hiring intentions strong -- and consumer confidence jumped to the highest since 2010. That suggests little concern from households and companies about JobKeeper’s end.Sally Sinclair, head of National Employment Services Association that helps the jobless into work, worries that the end of the wage subsidy will compound existing problems. “Underemployed workers often live pay check to pay check and frequently have little, if any, reserves,” she said in an interview with Bloomberg News this week. “These workers, many from hard-hit sectors such as tourism, retail and hospitality were among the 361,000 Australians who rushed to access their superannuation during Covid-19.”The RBA, late last year, cut the key interest rate and three-year yield target to 0.10% to lower borrowing costs across the economy. It also initiated QE to keep a lid on the currency, which has soared nearly 35% from its March 2020 nadir.The government also announced tax cuts, incentives for firms to invest and hire and infrastructure projects to boost activity.(Updates with comment from economist in seventh paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.