Australia's unemployment rate fell unexpectedly to 3.9% in November, an eight-month low, defying forecasts of a rise to 4.2%. This sharp decline highlights the labor market’s surprising strength despite broader economic challenges.
The Australian Bureau of Statistics (ABS) reported a net employment increase of 35,600 in November, surpassing expectations of 25,000. Full-time jobs rose by 52,600, offsetting a 17,000 decrease in part-time positions. Annual job growth slowed slightly to 2.4%. The participation rate edged down to 67.0% from 67.1%.
The robust labor data comes amid signs of economic slowdown, with GDP growth of just 0.8% year-on-year in the third quarter—levels last seen during the early 1990s recession. Despite this, the labor market continues to defy expectations, bolstered by an unusual influx of individuals transitioning from unemployment to employment in November, according to ABS labor statistics head David Taylor.
This resilience has tempered speculation of an imminent interest rate cut by the Reserve Bank of Australia (RBA). Recent dovish comments from the RBA suggested confidence in inflation returning to target, fueling market bets on a February rate reduction. However, the unexpectedly strong jobs data may alter this outlook.
The Australian dollar rose 0.8% following the release of the data, underscoring market optimism.