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Australian jobs growth surges, unemployment near 5-year lows

Published 14/12/2017, 12:11 pm
© Reuters.  Australian jobs growth surges, unemployment near 5-year lows
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SYDNEY, Dec 14 (Reuters) - Australian employment sprinted ahead for a 14th straight month in November, the longest stretch of gains since the early 1990s, while the jobless rate remained at the previous month's near five year low.

Thursday's figures from the Australian Bureau of Statistics showed a lofty 61,600 net new jobs were added in November from an upwardly revised 7,800 gain in October and forecasts of a 18,000 rise.

The detail was also upbeat with full-time jobs climbing 41,900, bringing gains since November 2016 to a blistering 304,600. The unemployment rate was 5.4 percent, in line with forecasts and unchanged from the previous month, which was the lowest reading since February 2013.

The strong set of numbers sent the Australian dollar AUD=D4 higher by more than a quarter of a U.S. cent to $0.7661, a level not seen since early November.

Interest rate futures 0#YIB: narrowly pushed forward the probability of a rate hike in the 1.5 percent cash rate, although an increase is not fully priced in until early 2019.

While firms are scooping up workers, they are not so keen on paying them more, leaving wage growth near record lows and putting an unwelcome cap on consumer spending and inflation. scrooge-like pace of wage rises is a major reason the Reserve Bank of Australia (RBA) last month forecast core inflation would not reach the floor of its 2 to 3 percent target band until early 2019, a year later than previously hoped.

Wages growth is crawling at 2.0 percent, only a sliver above inflation of 1.8 percent. That is curtailing the spending power of Australian consumers who are already saddled with a mountain of debt.

Australia's biggest department store Myer Holdings MYR.AX issued a profit warning just 10 days before Christmas, saying a slump in customer footfall would make first-half earnings "substantially lower" than a year ago. out last week showed Australia's economy accelerated at an annual 2.8 percent pace in the third quarter, but household consumption, which accounts for 55 percent of the country's gross domestic product, rose just 0.1 percent.

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