The Australian unemployment rate rose to 6.3% in November, the highest level since 2002.
According to the Australian Bureau of Statistics (ABS), the country’s unemployment rate increased by 0.1% from the previous month, even though 42,700 jobs were added to the economy.
The overall figure was ahead of expectations. Analysts had forecast 15,000 new jobs.
However, only 1,800 of the jobs added were full-time, with the remainder being part-time.
The jobless rate rose because of a higher participation rate (people in work or looking for a job), which offset the number of new jobs added.
The somewhat mixed job market data sent Australian shares down. The benchmark S&P/ASX 200 falling by 0.5% to 5,231 points.
Economists say that the Australian central bank is under pressure to reduce interest rates further from their record low of 2.5%.
A sharp fall in the value of commodities along with a global slowdown in inflation may prompt the Reserve Bank of Australia (RBA) to cut rates sooner rather than later.
For 16 straight months the RBA has not moved on interest rates. It’s now expected that rates will be cut at RBA’s next policy meeting in early February and it is almost certain that the RBA will cut rates to around 2.25 percent by April.
Michael Workman, a senior economist at Commonwealth Bank, said:
“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,”