Jobless rate inches up while hiring gains continue

The rate rose to 4% as expected

Jobless rate inches up while hiring gains continue

The unemployment rate in Australia continued its streak of low levels in December, even as the economy extended its streak of hiring gains. This development showed the labour market’s resilience despite high interest rates.

According to the Australian Bureau of Statistics, the jobless rate continued to fare as expected by economists, inching up to 4%. Meanwhile, employment rose by 56,300, driven up by part-time roles. THis blew past economists’ forecasted gain of 15,000.

The Australian edged higher after the release of the data, while the three-year government bond yields saw little change. Meanwhile, traders have maintained the expectations that the RBA will make its first cut in April, while reducing the chance of easing in February to about two-thirds from more than 70%.

Callam Pickering, APAC economist for job site Indeed, pointed out how tight the Australian labour market was, adding that the full-time employment gains in the previous year had accounted for two-thirds of the employment gains. This suggested that the economy was continuing its trend of creating several high-quality and well-paying jobs.

“This sort of labour market strength, coupled with what is otherwise a weak economy, will give the RBA plenty to think about when they meet in February,” said Pickering.

Notably, the country’s resilient jobs market has reassured Reserve Bank Governor Michelle Bullock that the economy was still on a narrow path heading towards a soft landing. The RBA has also expressed greater confidence that inflation is on track to return to the 2-3% target in a timely manner.