- Kieran Davies, Barclays chief economist for Australia
Australia's unemployment rate declined to the lowest level in 20 months following the strongest two-month period of job creation in 28 years. The total number of people with a job surged 71,400 in November, following a gain of over 56,000 the month before, according to the Australian Bureau of Statistics. As a result, the jobless rate declined from 5.9% in October to 5.8% last month. In contrast analysts had predicted net job growth to fall by 10,000 in the reported month and the unemployment rate to climb to 6.0%. Furthermore, the participation rate, which measures the number of people either employed or actively looking for work, increased to 65.3% from 65.0% in October. However, analysts cautioned that the data was volatile and noted that some of the job gains were due to a rotation in the groups of people being sampled for the monthly reading.
Surprise acceleration in jobs growth is expected to firm up the RBA's case to leave the cash rate at 2% in 2016. The RBA has lowered interest rates twice this year to encourage non-mining sectors of the economy to fill the gap left by the decrease in resources investment, but the transition has been patchy, with some businesses still remain reluctant to spend.
© Dukascopy Bank SA