Australia employment slips in Dec, jobless rate up

Jan 17 2013, 10:34 IST
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Australian employment fell unexpectedly in December, nudging the jobless rate up to 5.4%. (Reuters) Australian employment fell unexpectedly in December, nudging the jobless rate up to 5.4%. (Reuters)
SummaryAustralian employment fell unexpectedly in December, nudging the jobless rate up to 5.4%.

Australian employment fell unexpectedly in December, nudging the jobless rate up to 5.4 percent and pushing the local dollar down as the market narrowed the odds of further cuts in interest rates in coming months.

The local dollar lost a quarter of a US cent after the Australian Bureau of Statistics reported 5,500 net jobs were lost in December, below forecasts of a flat outcome. All the losses came in full-time employment which dropped 13,800.

Analysts suspect the jobless rate will continue to creep higher from here given sluggish domestic demand and the pressures of a historically high currency.

The market is pricing in at least one more easing in interest rates following the Reserve Bank of Australia's (RBA) cut to a record-matching low of 3 percent back in December.

Interbank futures show a one-in-three chance of a move at the RBA's next policy meeting on Feb. 5, though swap rates imply an eventual move to 2.5 percent this year.

The RBA has forecast that unemployment would only rise "a little further" in coming months. Many analysts see a risk it could increase steadily toward 6 percent as a boom in mining investment begins to plateau later this year.

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