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Australian jobs surge by most in 15 years, A$ jumps
[SYDNEY] Australian employment surged by the most in over 15 years in November and nudged the unemployment rate to a 19 month-low, but so stunning was the result that it revived doubts about the reliability of the data.
The local dollar surged after the Australian Bureau of Statistics reported a staggering 71,400 net new jobs were created in November, completely confounding forecasts for a drop of 10,000. It was the second straight month of huge gains with October enjoying a rise of 56,100.
The surprises kept coming as the jobless rate dipped to 5.8 per cent, when analysts had looked for a rise to 6.0 per cent, and the participation rate jumped to its highest since 2012 at 65.3. "We looked at the October number as almost too good to be true, and you look at today's number and it blows it out of the water even more," said Tom Kennedy, an economist at JPMorgan. "So two very very strong back-to-back months and it's very difficult to pin any drivers down because economic growth is still pretty soft." The Australian economy grew 2.5 per cent in the year to September, short of the 3.0 to 3.25 per cent pace that used to be considered "normal".
The ABS has had trouble with its jobs survey in the past that resulted in large revisions in both directions. The agency noted that the new entrants in its survey sample in both October and November had higher employment and participation rates than the average, which may change in the December sample.
Still, on the surface the numbers were strong and markets reacted by lifting the Australian dollar almost a cent to $0.7332.
Interbank futures further widened the odds on a cut in interest rates. The surprising resilience of employment was already a major reason the Reserve Bank of Australia (RBA) had resisted pressure for an easing in the 2 per cent cash rate.
According to the November data annual growth in employment accelerated to a blistering 3.0 per cent. That compares to 1.9 per cent in the United States, where the strength of the labour market will likely lead to a hike in interest rates this month.