SYDNEY (Reuters) -Australia’s jobless rate posted a shock decline to an eight-month low in November, while employment rose more than forecast, evidence of a labour market far more resilient than expectations.
The figures led markets to scale back bets for an easing in February, after the Reserve Bank of Australia unexpectedly turned dovish on Tuesday by opening the door to a rate cut.
The Australian dollar rose 0.6% to $0.6409, while three-year bond futures fell 7 ticks to 96.192. Swaps now imply a 55% chance of a cut in February, compared with 68% before.
Figures from the Australian Bureau of Statistics on Thursday showed the jobless rate dropped to 3.9% in November from 4.1% in October, confounding analysts who had looked for a rise to 4.2%. The participation rate edged down to 67.0%, from 67.1%.
Net employment rose by 35,600 in November from October, when it increased by a revised 12,200. That was above market forecasts for a 25,000 rise, while annual jobs growth slowed just a little to 2.4%.
“In November we saw a higher than usual number of people moving into employment who were unemployed and (were) waiting to start work in October,” said David Taylor, ABS head of labour statistics.
“This contributed to the rise in employment and fall in unemployment.”
The RBA has held its policy steady for a year now, judging the current cash rate of 4.35% – up from 0.1% during the pandemic – is restrictive enough to bring inflation to its target band of 2-3% while preserving employment gains.
Governor Michele Bullock has mentioned the jobs report as one of the many data releases – including inflation and retail sales prints – the central bank will be watching before it next meets in February.
Data showed economic growth in the third quarter was surprisingly weak, defying expectations for a rebound. Wage growth has also underwhelmed, suggesting unemployment perhaps does not need to rise further to keep inflation anchored.
The jobs report showed hours worked remained flat in November, while the underemployment rate fell 0.1 percentage points to 6.1%.
(Reporting by Stella Qiu and Wayne Cole; Editing by Muralikumar Anantharaman and Edwina Gibbs)
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