Unemployment falls to 4.1% in December, raising pressure on RBA to hike rates

Australia’s unemployment rate unexpectedly fell to 4.1% in December, down from 4.3%, after a bumper month of jobs growth, the Australian Bureau of Statistics said. The result may add to pressure on the Reserve Bank to raise interest rates.

The ABS reported employed Australians increased by 65,200, with full‑time employment up 54,800 and part‑time jobs up 10,400, while the underemployment rate fell from 6.2% to 5.7%. The jobs data arrived ahead of next Wednesday’s inflation figures, which economists say will go a long way to determining whether the RBA will hike rates at its 3 February meeting. Before the release, financial markets had been pricing in nearly a 30% chance of a rate rise.

The coverage noted that further evidence of a resilient labour market would suggest the economy is running above its capacity to grow without pushing inflation higher. The upcoming inflation release is therefore seen as a key influence on whether the central bank will move at its next meeting.

Key Topics

Business, Rba, Abs, Unemployment Rate, Employment Growth, Inflation