* Sept employment falls 9,800 vs forecasts of +15,000
* Full-time jobs dive 53,000 in unusually large move
* Unemployment stays at 3-year low of 5.6 pct
* Aussie dlr slips as data adds to risk of rate cut
By Wayne Cole
SYDNEY, Oct 20 (Reuters) - Australian employment unexpectedly fell 9,800 in September as firms shed a huge 53,000 full-time jobs, a disappointing report that slugged the local dollar and could rekindle speculation of further rate cuts.
Thursday's data from the Australian Bureau of Statistics showed the unemployment rate stayed at a three-year trough of 5.6 percent, but only because more people stopped looking for work. Indeed, the participation rate dropped to its lowest since May 2014 at 65.5 percent.
The fall in employment in September was also the second straight month of declines and confounded analyst forecasts for a rise of 15,000.
The sheer size of the fall in full-time jobs did raise some flags with analysts, who suspected sampling problems with the data may have overstated the weakness.
"Some very big moves going on in these figures and it always pays to be suspicious when you get very big moves," said Michael Blythe, chief economist at Commonwealth Bank.
"But it's something that will have the Reserve Bank thinking hard about what they need to do with when they meet next month."
Just this week Reserve Bank of Australia (RBA) Governor Philip Lowe emphasised that rising underemployment and weak hours worked meant there was a lot more slack in the labour market than the unemployment rate on its own might suggest.
Indeed, such was his uncertainty about the labour market that it left analysts with the impression a sustained rise in the jobless rate could trigger another cut in rates.
Consumer price data for the third quarter due next week will be crucial. A very low reading for underlying inflation could make a case for an easing as early as the RBA's Nov. 1 board meeting.
Surprisingly low readings for inflation prompted the RBA to cut rates in August and May, taking them to a record low of 1.5 percent.
Investors have since priced out much chance of another easing, in part because yet cheaper borrowing could overheat already bubbly housing markets in Sydney and Melbourne.
Interbank futures 0#YIB: still only imply a 16 percent probability of an easing in November, though the local dollar did take a knock on the jobs report, falling a third of a U.S. cent to $0.7695 AUD=D4 .
"When you have a labour market not looking as robust as you would have thought, then it reduces the chance that wages will pick up and inflation will pick up, and that increases the chance that they will need to lower rates again," said Janu Chan, a senior economist at St George Bank.
"We had a rate cut forecast for November and still do."