Australia Jobs Soared in November, Driving Down Unemployment
Bloomberg
Published Dec 16, 2021 05:14
(Bloomberg) -- Australian employment soared last month, exceeding expectations and pushing the jobless rate lower as the easing of virus restrictions along the nation’s populous east coast unleashed a wave of hiring.
The economy added 366,100 roles in November, compared with economists’ estimate for a 200,000 increase, data from the Australian Bureau of Statistics showed Thursday. The unemployment rate declined to 4.6% after having risen in the previous two months and was better than the median forecast of 5%. The participation rate rose to 66.1% from a revised 64.6% in October.
Australia’s benchmark three-year bond yields extended gains to 11 basis points while the currency swung from a decline to a small advance.
The result will be a shot in the arm for a conservative government that’s trailing in opinion polls ahead of an election due by May. It’s aiming to further buttress its economic credentials after steering the country through a once-in-a-century pandemic, with Treasurer Josh Frydenberg releasing updated budget forecasts later today that are expected to show an improving fiscal position.
The data will also be welcomed by the nation’s monetary authorities, with the Reserve Bank aiming to tighten the labor market sufficiently -- meaning unemployment around 4% -- to spur faster inflation. The RBA is running ultra-low interest rates at present and Governor Philip Lowe says he won’t be hiking until actual inflation, not forecast, is sustainably within the central bank’s 2-3% target.
The RBA forecasts underlying inflation will only reach the mid-point of the band in late 2023. Money markets are more optimistic on the economy’s prospects and are challenging Lowe’s (NYSE:LOW) stance: pricing in three rate increases next year.
Today’s jobs data, while only one month, is likely to add ballast to the market’s view that the central bank’s guidance puts it on track to fall behind the curve.
©2021 Bloomberg L.P.
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Written By: Bloomberg
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