Unemployment hits 12-year high despite jump in job creation: ABS

Updated

Unemployment has risen to a 12-year high of 6.3 per cent, despite almost 43,000 jobs being added in November.

The Bureau of Statistics estimates for November show 40,800 part-time jobs and 1,800 full-time jobs were added to the economy last month, seasonally adjusted.

However, the participation rate - the proportion of people in work or looking for it - also increased to 64.7 per cent, offsetting the job gains and lifting the unemployment rate to its highest level since September 2002.

The result matched economist expectations, with a survey of 27 analysts by Bloomberg showing they had typically expected unemployment to tick higher to 6.3 per cent.

The Australian dollar edged up from 83.5 US cents just before the data release at 11:30am (AEDT) to 83.7 US cents just after on the better than expected job creation.

One disappointing aspect of the figures was the dominance of part-time work in the job creation, which also fed through to a 0.3 per cent fall in the total number of hours worked in Australia last month.

This trend was also apparent in quarterly underemployment figures released by the ABS today.

The ABS estimate for underemployment was 8.6 per cent for the November quarter, up 0.3 percentage points on the previous three months.

Combined with the unemployment rate, the ABS estimated that 15 per cent of working age Australians were receiving less paid work than they would like, up 0.6 per cent on the previous quarter.

The more stable trend figures also had unemployment edging up from 6.2 to 6.3 per cent, and the participation rate steady.

Commonwealth Bank senior economist Michael Workman told Reuters the rise was modest, but still hinted at the prospect of more interest rate cuts next year if it continued.

"The net outcome is a labour market that is just not providing all the jobs that are required for the new entrants, so we get this gradual drift upward in the unemployment rate," he said.

While a growing number of analysts are now forecasting more rate cuts, BT's chief economist Chris Caton said the figures were not that dire.

"By my calculations, if just six fewer people in these dwellings had reported themselves as unemployed, the unemployment rate would have shown no change," he wrote in a note on the data.

"This is not to argue that it isn't high; only that there is no evidence in today's data that it is still going up."

Topics: economic-trends, unemployment, australia

First posted