After the surprise fall in Australia’s unemployment rate in September, economists had been expecting some sort of reversal in October. While this expectation was premature, the reversal did come about in November as sampling differences played out. However, the overall trend of a falling unemployment rate remained intact and the Australian economy keeps on producing employment growth.
The ABS has now released employment estimates for December. The report indicates the total number of people employed in Australia increased by 21,600 and the unemployment rate ticked down from 5.1% to 5.0%. Several senior economists described the figures as “solid” but then noted an “easing” (or a similar word) in the rate of growth of employment.
Market expectations prior to the report’s release were for 20,000 new positions to be created and for the unemployment rate to slip back to 5.1%. Despite this, financial markets reacted by sending local bond yields and the Aussie dollar lower. 3-year ACGB yields finished the day 3bps lower at 1.74% while 10-year and 20-year yields both slipped 1bp lower to 2.27% and 2.63% respectively. The Aussie dollar initially jumped from 71.45 US cents to 71.55 US cents but then steadily fell away during the afternoon to around 71.05 US cents.