Full-time work makes a welcome comeback in Australia

Pedestrians walk past a branch of Commonwealth Bank in the central business district in Sydney, Australia.
Mark Metcalfe | Getty Images

Australian employment proved surprisingly strong in November as full-time jobs made a comeback after a very tough year, a welcome counterweight to recent gloom over weak third-quarter growth.

Thursday's data from the Australian Bureau of Statistics showed employment rose a net 39,100 in November, handily outpacing forecasts of a 20,000 gain. October's report was also revised upward to show an increase of 15,200.

The unemployment rate did tick up to 5.7 percent, from a three-year low of 5.6 percent, but only because more people went looking for work.

Crucially, full-time jobs bounced by 39,300 and brought the gains since September to a hefty 80,000, almost recovering all the losses suffered since January.

"Suddenly the trend for full-time employment looks to be improving relative to part-time employment," said Shane Oliver, head of economics at AMP Capital. "The figures look a bit stronger than previously thought."

The prevalence of part-time work over full-time has been a feature of the labour market this year and one not welcomed by the government since it crimps both incomes and tax revenue.

The data will be a tonic for the government of Prime Minster Malcolm Turnbull after figures last week showed the economy shrank by 0.5 percent in the third quarter, the first contraction since 2011.

It also gave the local currency a brief respite from selling after the first hike in U.S. interest rates this year sent the U.S. dollar surging.

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The Australian dollar slid more than 1 percent overnight on the Fed rate hike but found some support around $0.7400 from the jobs data.

The futures market slightly pared back the chance of a cut in interest rates from the Reserve Bank of Australia (RBA), though the probability had already been under 20 percent.

There were even some tentative signs of a jobs turnaround in the states of Western Australia and Queensland, which have been particularly hard hit by a long slump in mining investment.

All the losses in full-time jobs up to October had been concentrated in those two states, but November saw an increase of 25,300 in Queensland and 11,100 in Western Australia.

The outlook for miners has brightened in recent months as prices for key commodities rallied sharply. Just this week coking coal contract prices for the first quarter of 2017 were set at $285 a tonne, the highest since late 2011 and up from $81 at the start of this year.

The RBA estimates the rundown in mining investment is now more than 80 percent complete, a point emphasised by Governor Philip Lowe in a speech last month.

"There are reasonable prospects for stronger growth of nominal demand in the mining states and, by extension, for the economy overall," was Lowe's hopeful conclusion.

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