Australia’s Jobs Surge in December, Unemployment Rate Creeps Higher

Image Credit: Reuters

Australian employment significantly exceeded expectations in December, driven by a surge in part-time positions, although the unemployment rate ticked up as more people began actively seeking work.

According to the Australian Bureau of Statistics, net employment rose by 56,300 in December, following a revised increase of 28,200 in November. This was much higher than the market forecast of 15,000. Annual job growth accelerated to 3.1%. The unemployment rate increased slightly to 4.0% from 3.9%, aligning with market predictions, while the participation rate edged up to a record 67.1% from 67.0%.

The data suggests that strong demand for labor is being met by a rising workforce, indicating a healthy job market.

The Australian dollar gained 0.1% to $0.6230. Three-year bond futures pulled back from earlier gains but remained up 10 ticks at 96.06, supported by mild inflation figures from overseas.

Swaps markets indicate a 68% chance the Reserve Bank of Australia (RBA) will cut rates on February 18, following the release of the quarterly inflation report and updated retail sales data.

The RBA has kept interest rates steady for a year, judging that the current cash rate of 4.35%—up from 0.1% during the pandemic—is restrictive enough to bring inflation within the target range of 2-3% while supporting employment growth.

Monthly inflation data for October and November show some progress in reducing underlying inflation, but consumer spending has been slower than expected, despite the government's tax cuts.

Part-time jobs surged by 80,000 in December, and hours worked increased by 0.5%. Job ads have stabilized after sharp declines, but wage growth has been lackluster, indicating that the job market is not driving inflationary pressures.

Paraphrasing text from "Reuters" all rights reserved by the original author.