Investing.com-- Australia's job market expanded far more than anticipated in December, showing labor market resilience despite challenges from high interest rates and inflation.
The total number of employed people grew by 56,300 in December, data from the Australian Bureau of Statistics showed on Thursday. The reading was significantly higher than expectations of 14,500 people, and rose from the 36,500 seen in the prior month.
This brought Australia’s participation rate- which gauges the percentage of the population that is in the labor space- up slightly to 67.1% in December, compared to expectations it would remain steady at 67%.
The unemployment rate rose to 4% in December, in line with forecasts, and compares with a 3.9% rise in the previous month.
Australia has seen its job market expanding past expectations for eight out of the last nine months, with a dip seen in October.
In November, a higher than-usual number of people moved into employment who were unemployed and waiting to start work in October. This trend continued in December with employment rising sharply, and contributed to a rise in unemployment.
A tight labor market has been one of the key concerns for the Reserve Bank of Australia in keeping interest rates steady. The RBA has held rates steady at nearly a decade high, citing strong a labor market and sticky underlying inflation.
Strength in the labor market has also kept inflation underpinned amid strong consumer demand.
The RBA is scheduled to announce its next interest rate decision on February 18, 2025.
Market analysts widely anticipate that the RBA will commence a rate-cutting cycle in 2025, with the first reduction expected in May.