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Australia jobs blow past forecasts, lengthen rate cut odds
[SYDNEY] Australian employment surged past all expectations in October while the jobless rate fell sharply to a five-month low, a rousing report that lengthened the odds on a cut in interest rates and sent the local dollar flying.
The Aussie jumped half a US cent after the Australian Bureau of Statistics reported 58,600 net new jobs were created in October, almost four times market forecasts.
The breakdown was also upbeat with 40,000 full-time positions while the jobless rate dropped unexpectedly to 5.9 per cent, from 6.2 per cent.
Analysts cautioned that the data were volatile and have had measurement problems in the past, but noted other indicators of labour demand had been improving for some months.
"It's across the board, unequivocally, a strong number,"said JPMorgan's chief economist, Stephen Walters. "Jobs are being lost in mining but we're getting other jobs in areas like retailing and transport and tourism.
"Near term, it kills off any chance of the RBA cutting interest rates, but you can't rule it out next year." The Reserve Bank of Australia (RBA) cited the resilience of employment when it skipped a chance to ease this month, but even then it had expected the unemployment rate to remain at 6.0 per cent or just above for another whole year.
Investors reacted by sharply lengthening the odds on another cut in the 2 per cent cash rate, virtually pricing it out for December. The market probability of a move in February dropped to around 28 per cent, from 56 per cent before the data.