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[SYDNEY] Australia's unemployment rate unexpectedly fell in January, despite a plunge in full-time jobs, underscoring the mixed picture of the country's labor market.
Key Points: Jobless rate fell to 5.7 per cent from 5.8 per cent; economists forecast 5.8 per cent. Employment rose 13,500 from December versus forecast 10,000 gain. Full-time jobs slumped by 44,800; part-time employment rose 58,300. Participation rate fell to 64.6 per cent from 64.7 per cent; economists predicted 64.7 per cent.
The Australian dollar bought 77.16 US cents at 11:56am in Sydney, compared with 77.23 US cents before the report.
Australia's labour market is sending mixed signals following lacklustre hiring last year, when full-time jobs virtually stagnated as gains were primarily part-time. The unemployment rate held below 6 per cent partly due to discouraged job-seekers giving up the hunt, underscoring spare capacity in the labour market. The Reserve Bank of Australia last week cited forward indicators suggesting an improved hiring outlook while predicting the jobless rate was unlikely to fall far because of a high level of under-employment.
Australia's economy is divided: on the east coast property prices are booming, spurring housing construction and attracting people from other states, while local governments are pouring cash into infrastructure. In the west and north, where a mining investment boom is unwinding, property prices are falling, businesses are going bust and people are leaving. Indeed, internal migration is the main factor containing unemployment in Western Australia and Queensland and stopping it falling too far in Victoria and New South Wales.
"January's labour market figures highlight that jobs growth has sustained its recent momentum," said Paul Dales, chief Australia and New Zealand economist at Capital Economics Ltd. "But the now-familiar problem of the new jobs being mostly part-time ones rather than full-time ones reared its ugly head again."