Australia adds jobs, unemployment still hits decade high

SYDNEY: Australian employment rose by much more than expected in November but most of the jobs were part time and the jobless rate still hit a decade high, making for a mixed message on the economy.

The Australian dollar added a quarter of a US cent after employment rose 42,700 in November, handily topping forecasts of a 15,000 increase. However, all but 1,800 of those positions were for part-time work.

The jobless rate also rose a tenth to 6.3 percent, the highest since late 2002 and likely to be another blow to fragile consumer sentiment.

"It's a hell of a lot better than expected but the devil is always in the detail.

The unemployment rate ticked up so I think the market will still be of the view that the employment is pretty weak," said Michael Workman, a senior economist at Commonwealth Bank.

"It's enough for the market to think, in the bigger scheme of things, maybe the risks are biased towards a rate cut early next year." The Australian Bureau of Statistics' jobs survey has been plagued with problems in recent months which shook market confidence in the series. The bureau believes it has ironed out the problems but it will take a while for analysts to be sure.

As a result the market reaction was relatively limited.

The Australian dollar edged up to $0.8362 but largely because investors were cutting back on long US dollar positions ahead of year-end.

Interbank futures barely budged as the market continued to wager on at least one rate cut from the Reserve Bank of Australia (RBA).

Recent sharp falls in prices for some of Australia's major commodities, combined with a global slowdown in inflation, have revived the risk of an easing.

Indeed, investors priced in a chance of more than one move in the wake of disappointing data out last week that showed the economy grew a meagre 0.3 percent in the third quarter.

Futures show around a one-in-four probability of a cut at the RBA's next policy meeting in early February and are almost fully priced for a move to 2.25 percent by April.

Still, most leading indicators of the labour market suggest employment is growing moderately at perhaps 1.0 to 1.5 percent a year, enough to keep up with growth in the workforce though not enough to pull down the jobless rate.

Notably, job advertisements rose for a sixth straight month in November to reach their highest in 23 months.