- Justin Fabo, Australia and New Zealand Banking group economist
Australia's labour market softened in the beginning of the year, since the unemployment rate unexpectedly jumped in January as full-time employment declined the most since 2013. The jobless rate rose to 6.0% last month, up from 5.8% in December, according the Australian Bureau of Statistics, after employment plunged by a net 7,900 in January. Economists, however, had expected job growth of around 13,000 in the reported month and the unemployment rate to remain unchanged at 5.8%. The ABS added that the number of full-time employed dropped 40,600, offsetting a 32,700 increase in part-time employment.
Australia, the most China-dependent economy in the developed world, is struggling with fallout from plummeting prices for its key commodity exports and waning resource investment. Strong job growth was one the reasons why the Reserve Bank of Australia has decided to maintain interest rates on hold since May. A year ago most economists were predicting the jobless rate to increase towards 7.0% as the mining investment downturn intensified. Currently market participants are pricing in a 50% chance the RBA will slash interest rates in May.
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