Jobs data defies the gloom

The jobless rate unexpectedly fell to a three-month low in November, bucking a trend of largely disappointing economic data over the past week.

Employment Minister Bill Shorten said the latest labour force figures, released on Thursday, were a respectable outcome given fragile global growth, record high unemployment in the euro area and ongoing uncertainty around the looming US fiscal cliff.

The unemployment rate fell to 5.2 per cent in November from 5.4 per cent the previous month, when economists had predicted a rise to 5.5 per cent.

Australian Bureau of Statistics data also showed the number of people in employment rose by 13,900, when a small fall was forecast.

While full-time employment fell by 4200, this was more than offset by an 18,100 increase in part-time jobs.

"These are a very respectable set of numbers and some good jobs news heading into Christmas, but we cannot be complacent for a moment," Mr Shorten said in a statement.

"The Gillard government remains acutely aware that conditions remain patchy in some sectors and some Australian businesses and families are under pressure."

Shadow treasurer Joe Hockey also welcomed the jobs news, coming against a backdrop of data releases pointing to an economy that "appears to be losing momentum".

The data is likely to have been a surprise to the Reserve Bank of Australia (RBA), which cut the cash rate again this week, while pointing to a softening labour market and an unemployment rate that was edging higher.

Financial markets wound back expectations of a further rate cut when the central bank board next meets in February.

However, National Australia Bank senior economist Spiros Papadopoulos said, given the weakness in the leading indicators of employment, he expected the unemployment rate to trend higher towards 5.5 per cent in early 2013.

"Slower economic growth next year will also weigh on the labour market," Mr Papadopoulos said in a client note.

"The upward trend in unemployment will be a key factor behind the RBA cutting interest rates further next year."

Commonwealth Bank of Australia economist Gareth Aird said the latest jobs numbers suggested the RBA's rate cuts in the middle of the year had the desired impact on the labour market.

But he, too, expects labour demand will soften in the coming months as the impact of a sustained strong Australian dollar and concerns over the global economy weigh on employers.

"In addition, the fiscal tightening at both the state and federal level will not help jobs growth," Mr Aird said.

However, he said Thursday's result should help alleviate consumer fears over jobs security, which would be a positive for household spending and the overall economy.

A separate survey found rising utility prices are the biggest concern for consumers heading into 2013.

Home loan provider Mortgage Choice's annual online consumer sentiment survey found 22 per cent of respondents putting rising utility prices as their greatest concern.

It was ahead of concerns of job security, the state of the global economy and the economic management by the federal government, which scored 11 per cent each.

Market Data

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    0.6753-0.0003-0.05%
    AUDEUR=X
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