Australian December labor market data a mixed bag, employment growth likely to be strong in near future

Australia’s labor force data released today is a mixed bag, with decent growth in jobs but a slight rise in the jobless rate. There has definitely been a slowdown of momentum in the labor market, noted ANZ in a research report.

The labor force data came in widely as expected for the month of December. Employment grew 13.5k, as compared with market expectations of a rise of 10k. November’s data was revised down slightly to 37.1k from 39.1k. Following a period of negative full-time jobs growth, full-time employment seems to be on the rise, growing 9.3k in December and 95k in the last three months of 2016. However, the labor market has lost some steam as employment growth decelerated to 0.8 percent year-on-year in December, as compared with 2.6 percent growth a year ago.

Meanwhile, the jobless rate rose a tad in December to 5.8 percent from November’s print of 5.7 percent. The participation rate rose t o 64.7 percent from 64.5 percent in the same period, with a marked increase in the participation of 15-24 year olds.

Average hours worked was up 0.3 percent in December. In terms of trend, average hours worked has increased in year-on-year terms to -0.3 percent in December, the most robust rate since December 2015. Rising average hours worked might imply that companies are beginning to offer under-employed workers more hours.

The December labor data is unlikely to unnerve the Reserve Bank of Australia with unemployment still around 5.75 percent, said ANZ.

“There has undoubtedly been some slowing in momentum in the labour market, but we continue to expect employment growth to be strong enough to underpin a slow downward trend in the unemployment rate”, added ANZ.

At 06:00 GMT the FxWirePro's Hourly Strength Index of Australian Dollar was bullish at 83.6938, while the FxWirePro's Hourly Strength Index of US Dollar was neutral at -24.5202. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex