Australia’s unemployment rate rose in November despite the creation of over 39,000 jobs.
The ABS released November employment estimates which indicated Australia’s unemployment rate rose from 5.6% to 5.7%. Part-time employment barely changed but full-time employment rose by 39,300 to produce a net increase of 39,100, well in excess of consensus expectations of 17,500. The unemployment rate rose as more people joined the workforce with the participation rate 0.2% higher at 64.6%. Total hours worked for the month fell by 0.6%, which brought the annual figure back to just 0.1% higher than the comparable from November 2015.
The figures had little or no effect on financial markets, which were still dealing with the US Fed’s latest interest rate decision. Bond yields rose sharply before the employment figures were released; 3 year bonds finished the day 9bps higher at 2.02% and 10 year yields rose 8bps to 2.91%.
Underemployment, which has been in the spotlight in recent months, fell 0.3% to 8.3%. In the 1980s, underemployment was under 5% but it jumped to around 7% during the 1990/91 recession and then jumped again during the GFC. Lengthy periods of economic expansion have not made much of a dent in it, although it did decline in the mining investment boom.