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Australia records biggest job gain this year, led by full-timers
[SYDNEY] Australia's economy recorded its biggest monthly jobs gain this year, led by full-time employment, while a higher participation rate also signalled a healthier labour market.
Employment jumped 39,100 from October, more than double economists' forecast for a 17,500 gain. October jobs gain was upwardly revised to 15,200 from 9,800. The jobless rate rose to 5.7 per cent from 5.6 per cent; economists forecast 5.6 per cent.
Full-time jobs surged by 39,300; part-time employment fell by 200. The participation rate rose to 64.6 per cent from 64.4 per cent; economists predicted 64.5 per cent.
The data showed a turnaround in hiring as full-time jobs came to the fore and the participation rate reversed declines of recent months, bringing optimism to an economy that contracted last quarter and where consumer confidence has weakened. It also validates the central bank's forecast hiring would improve in coming months after mixed messages from the labor market, and suggests policy makers will extend an interest-rate pause; the currency was little changed as Federal Reserve tightening overshadowed local news.
The Reserve Bank of Australia has kept the cash rate at a record-low 1.5 per cent for the past four months as it gauges which way the economy will break. Gross domestic product fell in the three months through September, just the fourth drop since a 1991 recession, while commodity prices led by coal are retracing highs from the mining boom era.
The data "would provide the RBA with some comfort following last week's shockingly weak GDP print and the soft tone" in business conditions, said Jo Masters, a senior economist at Australia & New Zealand Banking Group Ltd.
"While momentum in the labour market has slowed, we expect the unemployment rate to slowly trend lower. We continue to see the RBA on hold, with an easing bias."
"The underlying trends remain subdued across the board and consistent with our view that the labour market details are weaker than the headline unemployment rate would suggest," said Su-Lin Ong, head of Australian economic and fixed-income strategy at Royal Bank of Canada in Sydney. "Also consistent with this is the divergence between the traditional unemployment rate measure and the underemployment rate."
The "strength" in the labour market "is entirely due to seasonal adjustment not capturing recent employment trends, and the markets should ignore it," said Annette Beacher, head of Asia-Pacific research at TD Securities Ltd in Singapore. "Full-time hours worked are shrinking, and so it is difficult to construct a case for a pickup in wage inflation and overall inflation in Australia in the near term."
Queensland, the heart of the nation's resurgent coal industry, led job gains with 38,600 hires, bringing to an end three months of losses.
Western Australia, which has struggled with the unwinding of mining investment, recorded a jump in its unemployment rate to 6.9 per cent from 6.5 per cent.
The rustbelt state of South Australia recorded the highest unemployment at 7 per cent Hours worked in all jobs fell by 10.4 million.
Full-time employment has decreased by 45,800 in the first 11 months of this year, while part-time hiring jumped 126,500.