Australia employment grows, boosting case for more rate hikes

Employment in Australia saw an apparent surge in November — more than triple what economists had expected. The jobless rate remained steady at a 48-year low, showing the need for further interest rate hikes in 2023.

According to official data released on Thursday, employment rose 64,000 in November, while many analysts had looked for a gain of only 19,000.

This increase pushed up the participation rate to 66,8%, reaching historic highs. At the same time, the unemployment rate was at a 48-year low of 3.4%.

The report showed that labor markets in developed countries are resilient to sharp rate hikes. As a result, further monetary policy tightening by central banks to combat inflation is not ruled out.

David Bassanese, Chief Economist at Betashares Holdings Pty, highlighted that the Australian economy was not responding to higher interest rates. This suggests that the RBA will not start to ease off on the size of the rate jumps at its February policy meeting.