Australia’s unemployment rate rose to 4% in December, according to the Australian Bureau of Statistics, but strong job creation signals a resilient labor market.
Despite the uptick in unemployment, 56,300 additional people were employed, showing increased job-seeking activity.
The mixed employment data has created uncertainty about the Reserve Bank of Australia’s (RBA) expected interest rate cut.
The rise in part-time jobs, coupled with a higher unemployment rate, complicates the outlook.
The participation rate also saw a strong 67.1%, indicating a robust job market.
Cameron McCormack, a portfolio manager at VanEck, stated that the RBA is unlikely to rush into a rate cut due to the relatively stable labor market.
While investors had anticipated a 73% chance of a rate cut in February, there is still uncertainty.
Despite the increased unemployment rate, core inflation is trending toward the RBA’s target of 2% to 3%, and strong employment has helped many households cope with high living costs.
However, food charities are seeing unprecedented demand, indicating broader economic strain.
In December, spending on household goods fell by 8.3%, with renters making significant spending cuts amid the ongoing housing shortage.
Following the release of the data, the Australian dollar saw only a slight increase, reflecting the market’s uncertainty over the potential rate cut.
