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Australia unemployment falls but still near decade-long highs
[SYDNEY] Australia's unemployment rate fell slightly in December but remained near a decade-long high, official data showed on Thursday, as expectations rose the country's central bank will cut interest rates from already record lows.
Joblessness in Australia has edged higher in the past two years as the economy prepares for an expected sharp drop-off in mining investment this year, with the country looking to transition away from resource-driven growth.
The unemployment rate fell to 6.1 percent in December from a revised 6.2 percent the previous month, the Australian Bureau of Statistics said.
Some 37,400 positions were added last month, with full-time jobs increasing by 41,600 as part-time roles eased by 4,100.
The October data was revised to 6.3 per cent from 6.2 per cent, with the latest figure marking a 12-year-high.
"The leading indicators have been improving for some time and unemployment has been lagging that," Kieran Davies, Australia chief economist for Barclays, told AFP.
"Job ads have been rising and business surveys are better than last year." The latest figures were stronger than economists' forecasts of an unemployment rate of 6.3 per cent with an increase of 5,000 jobs. The Australian dollar jumped half a cent to 82.02 US cents after the data was released.
The participation rate - which measures the proportion of adults in work or looking for work - rose to a seasonally adjusted 64.8 per cent in December from 64.7 per cent in November.
Total aggregate hours worked fell 7.7 million hours to 1,597.8 million hours.
Despite the better-than-expected figures, economists were cautious about the reading given recent uncertainty over how the seasonally adjusted figures are calculated.
The Australian Bureau of Statistics is adjusting how it collects its data for the monthly survey and last month accepted all recommended changes from an independent review.
There are meanwhile growing expectations that the Reserve Bank of Australia could ease its main interest rate this year from 2.5 per cent to boost the economy amid the uneven shift away from a dependence on the mining sector.
An increasing number of economists have revised their forecasts, with ANZ - one of the nation's big four banks - on Wednesday saying it now expected the rate to be slashed by 50 basis points to 2.0 per cent in the first-half of this year.
"The case for rate cuts has been building over the past two months with weaker-than-expected GDP numbers released in early December and ongoing softness in non-mining activity outside of residential construction," ANZ chief economist Warren Hogan said.
"The big fall in global energy prices means lower than previously expected inflation in 2015 provides the scope for lower interest rates." Analysts said the Reserve Bank of Australia would be heartened by the better-than-expected December unemployment data given the central bank's expectations of a subdued labour market during the economic rebalancing.
"What would be welcome is stronger wage growth," TD Securities strategist Prashant Newnaha said.
"With full-time growth in jobs averaging (an increase of 25,000) each month for the last three months but... growth averaging a slower 8,000 per month for part-time jobs over the same period, it's a positive sign at least for now that the employment picture is turning."