Australia’s Job Market Shows Resilience

Investing.com — Australia’s job market expanded far more than anticipated in December, demonstrating resilience amidst challenges from high interest rates and inflation.

The total number of employed people grew by 56,300 in December, according to data from the Australian Bureau of Statistics released on Thursday. This figure significantly exceeded expectations of 14,500 and was an increase from the 36,500 seen in the prior month.

This growth raised Australia’s participation rate, which measures the percentage of the population actively involved in the labor force, to 67.1% in December, compared to expectations of it remaining steady at 67%.

The unemployment rate increased to 4% in December, aligning with forecasts, compared to a 3.9% rise in the previous month.

Australia’s job market has been expanding beyond expectations for eight out of the last nine months, with a dip noted in October. In November, a larger-than-usual number of individuals moved into employment from unemployment, a trend that continued in December and contributed to the rise in the unemployment rate.

A tight labor market remains a key concern for the Reserve Bank of Australia (RBA), which has maintained interest rates at nearly a decade high, citing strong labor market conditions and persistent inflation.

The strength of the labor market has also supported inflation due to strong consumer demand.

The RBA is set to announce its next interest rate decision on February 18, 2025. Market analysts widely expect that the RBA will begin a rate-cutting cycle in 2025, with the first reduction predicted in May.