Unexpected fall in unemployment for November

The latest figures show an unexpected fall in the unemployment rate in November.

Unemployment dropped from 5.4 per cent to 5.2 per cent, with 13,900 jobs created in the month.

Many economists thought falling job advertisements as well as public sector job shedding would push up the unemployment rate.

But while the number of full-time positions fell by 4,200, almost 1,4000 part-time jobs were added.

Employment Minister Bill Shorten welcomed today's better-than-expected result, but says Australia cannot become complacent.

"Whilst there are significant pockets of disadvantage and there are areas which are experiencing unemployment, across Australia this Christmas as Australians approach the great festival of the year they can say to themselves we've worked hard this year," he said.

The Shadow Treasurer Joe Hockey says the figures are welcome news amid other economic data that he thinks shows the economy is losing momentum.

Mr Hockey says that data includes the latest national accounts, which showed economic growth in the September quarter.

Commsec economist Savanth Sebastian says the figures show the job market is healthy, but risks remain.

"Given the multispeed nature of the economy, and the sluggishness that we're seeing in retail activity, we may start to see the unemployment rate tick higher," he said.

Mr Sebastian says he expects unemployment will rise again to 5.5 per cent next year.

"You need about 15-16,000 jobs created every month to keep the unemployment rate stable and that's if the participation rate remains stable - that's the real key indicator," he said.

"And after Christmas and into the new year some of those discouraged workers may find themselves back looking for work again and when that takes place we will start to see that unemployment rate tick modestly higher." The participation rate, or the number of people in work or looking for a job, remains at a six year low, meaning many people have given up looking for work altogether, and are not included in the official jobless rate.

The surprise result has pushed the Australian dollar higher, and weakened the chance of an interest rate cut early next year.

On Tuesday the RBA cut rates to 3 per cent, a figure not seen since the depths of the global financial crisis.

But last night RBA deputy governor Phil Lowe says the figure takes into account the major banks not passing on rate cuts in full.

"The cash rate today is around 1.5 percentage points lower than it otherwise would have been," he told a meeting of economists last night.

"And the fact that the bank has offset the effect of higher funding costs on lending rates means that the normal level of the cash rate is lower than it otherwise would have been."

Market Data

  • Currencies
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    NamePriceChange% Chg
    0.9326-0.0001-0.01%
    AUDUSD=X
    0.5556+0.0002+0.04%
    AUDGBP=X
    0.67520.000.00%
    AUDEUR=X
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