Australia’s November jobs fall most in nine months, unemployment rate steady

[SYDNEY] Australian employment fell in November by the most in nine months, while annual jobs growth slowed sharply from earlier this year, a sign the labour market is cooling and could ease pressure for a near-term rate hike.

Figures from the Australian Bureau of Statistics on Thursday showed net employment fell 23,100 in November from October, when it jumped 41,200. That was far below market forecasts of a 20,000 gain. Full-time jobs dropped by 56,500.

Annual growth in jobs slowed to 1.3 per cent in November, down from 3.5 per cent at the start of the year and lagging the country’s 2 per cent population growth.

The jobless rate, however, stayed steady at 4.3 per cent, when analysts had looked for a rise to 4.4 per cent. The participation rate fell to 66.7 per cent, from 66.9 per cent, while hours worked went flat after a strong run.

“Some of the weakness is likely noise. Jobs surged in October, so some payback was expected in November,” said Harry Murphy Cruise, head of economic research at Oxford Economics.

“For that reason, it’s better to focus on underlying trends rather than month-to-month moves. On that front, the picture is of a labour market that is gradually losing momentum.”

The Australian dollar slipped 0.1 per cent to US$0.6667, while three-year government bond futures extended an earlier rally from the US Federal Reserve’s decision to cut rates overnight to stand 9 ticks higher at 95.85.

Swaps imply a 23 per cent chance that the Reserve Bank of Australia will raise interest rates in February, while a move in May is about 70 per cent priced in. There are about two rate hikes priced in by the end of next year.

The RBA held interest rates at 3.6 per cent on Tuesday and ruled out further policy easing as inflation spiked. Governor Michele Bullock said the board was debating between maintaining the current stance or potentially raising rates after three rate cuts this year.

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The central bank still judged the labour market to be a little tight relative to full employment, which could help to explain some of the inflationary pressures in the economy.

Headline inflation has climbed for four months in a row to 3.8 per cent in October, with the trimmed mean measure running at 3.3 per cent, above the mid-point of the target band of 2 to 3 per cent.

The economy, which could be running near its speed limit, grew at the fastest pace in two years last quarter, fuelled by business, government and consumer spending. REUTERS