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Australia's jobless rate jumps to 5.3%, Australian dollar comes off highs
[SYDNEY] Australian employment surpassed expectations for a third straight month in January but the jobless rate jumped by more than analysts had predicted, a mixed outcome that knocked the local currency lower and argued for more stimulus.
Thursday's data from the Australian Bureau of Statistics (ABS) showed 13,500 net new jobs were created in January, beating forecasts for 10,000 and following a surprisingly strong 28,900 gain in December.
All of the increase was led by full-time work, which surged 46,200 while part-time jobs fell by 32,700.
Yet, the unemployment rate jumped to 5.3 per cent from 5.1 per cent in December which was the lowest reading since March 2019 as more people went looking for work. Analysts had predicted that number would rise to 5.2 per cent.
While the composition of the job growth was encouraging, a sharp increase in the unemployment rate argued for the need for more stimulus.
As a result, the Australian dollar gave up almost all of its gains in the aftermath of the data to be last flat at US$0.6678 from a high of US$0.6695.
Australia's central bank has long argued unemployment needs to fall to at least 4.5 per cent to deliver a desperately-needed lift in wage growth, which has been stuck around 2.3 per cent for a year or more.
That was a major reason it cut its benchmark rate three times last year to a record low of 0.75 per cent. It held rates at its first meeting of the year this month, saying it was "carefully" monitoring the employment sector.
Investors believe the Reserve Bank of Australia (RBA) will stay patient for some while yet. Financial futures imply a meagre chance of a quarter-point cut next month while a cut in May is 40 per cent priced in.
Markets are wagering on one quarter-point easing to 0.5 per cent but not until September or October.