- ANZ
Australia's unemployment rate inched higher in November, despite the creation of more than 42,000 jobs during the reported month, underlying how a sluggish growth is reflected in the labour market, which is expected to stay fragile well into next year, adding to belief that the RBA will have to renew stimulus measures. The jobless rate rose to 6.3% up from 6.2%, according to the Australian Bureau of Statistics. It was the fastest pace of jobs creation since March 2012, but also the highest unemployment rate for more than 12 years. The labour force participation rate rose by 0.1 percentage point to 64.7%, offsetting the job gains. The Reserve Bank of Australia has come under more pressure to cut interest rates to provide support to the moribund economy, which avoided recession for more than 20 years, but is struggling to make transition to non-mining driven growth. The slowdown in China, its top trading partner, has also been a contributing factor. Despite admitting that labour demand will stay subdued, and that the economy will grow at a below-trend rate over the next few quarters, the RBA is holding firm on its stance that interest rates should remain steady, reiterating last week that "monetary policy is appropriately configured to foster sustainable growth in demand." Nevertheless, financial markets are pricing in a 30 basis-point cut in interest rates next year given the weak economic outlook, especially after third-quarter GDP data came in much lower than expected.
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