Unemployment falls to 6.1pc as 37,400 jobs added

Updated

Australia's unemployment rate has unexpectedly fallen to 6.1 per cent, with 37,400 jobs added, mostly full-time.

Economists surveyed by Bloomberg had typically been expecting unemployment to remain stuck at 6.3 per cent, but the Bureau of Statistics data showed unemployment fell to 6.1 per cent in December from a downwardly revised 6.2 per cent in November.

In even better news, all the positions added were full-time, with a rise of 41,600 in full-time employment more than offsetting a 4,100-strong fall in part-time jobs.

Rounding out a strong set of numbers, the participation rate — which measures the proportion of people aged over 15 in work or looking for it — rose from 64.7 to 64.8 per cent.

The Australian dollar surged from 81.4 to just over 82 US cents immediately upon the 11:30am (AEDT) release.

The fall in seasonally adjusted unemployment was enough to hold the more reliable trend unemployment figure steady at 6.2 per cent, with participation also steady at 64.7.

The only slight weakness was a 0.5 per cent fall in aggregate monthly hours worked, but this series tends to be fairly volatile.

Overall, the UBS economics team said the latest official employment figures were finally starting to catch up to leading indicators that pointed to an improving labour market, such as job ads.

"Today's labour market data was clearly much better than expected (again), with a welcome lift in jobs growth to a near four-year high of 1.9 per cent year-on-year, to finally be more consistent with the leading indicators of employment, which we have long flagged as pointing to an imminent pick-up," they wrote in a note on the data.

WA struggles while Queensland bounces back

It was the populous east coast states that led the improvement in Australia's labour market.

Queensland was the standout, with seasonally adjusted unemployment plunging from 6.8 per cent in November to 6.1 per cent in December.

Victoria and New South Wales had more modest improvements in their jobless rates, while Tasmania continued recent positive trends.

However, Western Australia's unemployment figure blew out from a state-leading 5.3 per cent, to 6 per cent, now behind New South Wales's 5.9 per cent rate.

It is important to note, however, that these state seasonally adjusted figures are extremely volatile month-to-month, with a much larger margin for error than the national figures due to the smaller sample sizes.

The two territories continue to have the lowest jobless rates overall, with the Northern Territory at 3.6 per cent and the ACT at 4.9 per cent in trend terms.

However, large-scale public sector layoffs have hurt the nation's capital, where unemployment is more typically below 4 per cent as it was earlier this year before many of the job cuts took effect.

Topics: unemployment, economic-trends, australia

First posted