AUSTRALIA employment far outpaced expectations for a second straight month in November as firms added to full-time staff, yet the jobless rate still rose to a 1-1/2 year high as more people went looking for work.

Figures from the Australian Bureau of Statistics on Thursday showed net employment jumped 61,500 in November from October, when they rose a revised 42,700. Market forecasts had been for an increase of around 11,000.

The jobless rate still rose to 3.9 per cent, from an upwardly revised 3.8 per cent, the highest reading since May last year. The participation rate climbed to a record high of 67.2 per cent.

The Australian dollar extended gains to be up 0.6 per cent to US$0.6705, the highest since early August, but three-year bond futures are still up 22 ticks to 96.28 thanks to easing expectations for global central banks next year.

Record inflows of migrants and students have boosted the supply of labour to meet demand, so while employment was a rousing 3.2 per cent for the year to Nov, but the labour force grew by 3.6 per cent.

This expansion of supply means the labour market is not the main driver of inflation and with the Federal Reserve sigalling rate cuts in the year ahead, futures are still pricing in that the Reserve Bank of Australia is now done tightening.

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The RBA last week kept interest rates unchanged at a 12-year high of 4.35 per cent and left the door open to another move. It has jacked up interest rates by a whopping 425 basis points in the most aggressive tightening campaign in the bank’s history to tame inflation.

The breakdown showed full-time employment rose by 57,000 in November.

Nonetheless, the data added to early signs of loosening in the market, with the ABS noting a slowdown in hours worked.

“The slowing in hours means that overall growth rates in employment and hours worked are now similar over the past 18 months,” said Bjorn Jarvis, ABS head of labour statistics.

“The narrowing gap between these two growth rates suggests that the labour market is now less tight than it has been.”

Vacancies have also been ticking lower as positions get filled. Job ads on Australia’s largest employment site SEEK, fell 4.3 per cent in November, although they’re still over 13 per cent higher than a year ago, suggesting the demand for workers is still strong. REUTERS