Australian jobs surpass forecasts in November, unemployment ticks up

  • Australian employment was surprisingly robust in November, while the jobless rate ticked higher as more people went looking for work in a generally upbeat report showing the labour market remained one of the strongest parts of the economy.
  • Figures from the Australian Bureau of Statistics on Thursday showed a net 37,000 new jobs were created in November, up from a downwardly revised 28,600 the month before and surpassing market forecasts of a 20,000 increase.
People walk past the Reserve Bank of Australia building in Sydney on May 3, 2016.
WILLIAM WEST | AFP | Getty Images
People walk past the Reserve Bank of Australia building in Sydney on May 3, 2016.

Australian employment was surprisingly robust in November, while the jobless rate ticked higher as more people went looking for work in a generally upbeat report showing the labour market remained one of the strongest parts of the economy.

Figures from the Australian Bureau of Statistics on Thursday showed a net 37,000 new jobs were created in November, up from a downwardly revised 28,600 the month before and surpassing market forecasts of a 20,000 increase.

The upbeat result comes after a disappointing print for gross domestic product last quarter, ongoing weakness in consumer spending and a downturn in the property market.

The detail in Thursday's report was not quite as impressive, with full-time positions that tend to offer fatter wages and greater security declining by 6,400.

The participation rate climbed to 65.7 percent and has stayed near all-time highs of 65.8 percent touched in January as more women and retirees go looking for work.

That nudged up the unemployment rate to 5.1 percent, when economists had expected it to remain at a 6-1/2 year low of 5.0 percent. The underemployment rate also rose to 8.5 percent to stay above the historical average.

The overall trend in Australia's labour market is still strong though with annual jobs growth of 2.3 percent, faster than the 1.6 percent rise in population. Full-time positions have expanded by almost 2 percent so far this year.

"The data largely confirms our view that the labour market is continuing to steadily move towards full employment, but that there is still spare capacity to absorb," said Sarah Hunter, a chief economist for BIS Oxford Economics.

"This will keep pressure on wages low and, while some sectors are now showing signs of labour shortages, it will be some time yet before we see a broad-based acceleration in wages growth," she said.

The data is unlikely to shift the Reserve Bank of Australia (RBA) from its neutral policy stance and so the local dollar stayed at $0.7120 after sliding 1 percent overnight following a rate hike by the U.S. Federal Reserve.

Odds on a RBA hike in the 1.5 percent cash rate imply steady rates well into 2020.

The central bank kept its cash rate unchanged at its December policy meeting and reiterated its outlook for only a gradual pick up in inflation.