Australian employment proved surprisingly strong in November as full-time jobs made a comeback after a very tough year, a welcome counterweight to recent gloom over weak third-quarter growth. Thursday's data from the Australian Bureau of Statistics showed employment rose a net 39,100 in November, handily outpacing forecasts of a 20,000 gain. October's report was also revised upward to show an increase of 15,200.
The unemployment rate did tick up to 5.7 percent, from a three-year low of 5.6 percent, but only because more people went looking for work. Crucially, full-time jobs bounced by 39,300 and brought the gains since September to over 84,000, almost recovering all the losses suffered since January.
"Suddenly the trend for full-time employment looks to be improving relative to part-time employment," said Shane Oliver, head of economics at AMP Capital. "The figures look a bit stronger than previously thought." The prevalence of part-time work over full-time has been a feature of the labour market this year and one not welcomed by the government since it crimps both incomes and tax revenue.
That will be a much-needed tonic for Treasurer Scott Morrison who has to hand down the government's mid-year budget review next week and faces the threat of a credit downgrade if his path to a surplus is not seen as credible. S&P Global has repeatedly warned it could cut Australia's prized AAA rating if the budget outlook continues to slip, a real risk given the economy shrank by 0.5 percent in the third quarter for the first contraction since 2011.
The better jobs data also helped steady the local currency around $0.7420, after a hike in US interest rates lifted its US counterpart across the board. The futures market slightly pared back the chance of a cut in interest rates from the Reserve Bank of Australia (RBA), though the probability had already been under 20 percent. There were even some tentative signs of a jobs turnaround in the states of Western Australia and Queensland, which have been particularly hard hit by a long slump in mining investment.
All the losses in full-time jobs up to October had been concentrated in those two states, but November saw an increase of 25,300 in Queensland and 11,100 in Western Australia.
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