Unemployment expected to edge higher

Most economists expect official figures due out today will show the unemployment rate is continuing its rise.

The data is widely tipped to show that fewer than 1,000 full-time jobs were added in October, with the jobless rate rising to 5.5 per cent.

The employment rate jumped from 5.1 to 5.4 per cent in September.

However, Commonwealth Bank senior economist Michael Workman is one of the few who believe the jobless rate will remain unchanged at 5.4 per cent.

"The way the jobs the labour markets working currently is that there are jobs growth centres, and that's mainly out of the services areas like health and education and some parts of retailing, and there's quite noticeable and widely reported job losses going on in manufacturing and those other parts of the economy, so the net result is a pretty flat jobs market," he said.

HSBC Australia chief economist Paul Bloxham also believes unemployment will remain steady, as the RBA's earlier rate cuts start to take effect on some labour intensive sectors.

"We're expecting to see an upswing in the housing construction cycle, so construction will get a bit of support in terms of employment," he explained.

Michael Workman says if he is wrong and the unemployment rate does rise again, it could be one of the key pieces of data that might bring more interest rate relief for borrowers.

"I think it would be one of the factors that would help the argument for a rate cut in December," he said.

"There's a few more bits of information coming out over the next few days that may help them frame that - there's the wages data, which is obviously fairly important as well, because wages are one of those costs that has a fairly big influence over the inflation numbers."

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