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UPDATE 1-Australia employment dips in Dec, trend still strong

Published 14/01/2016, 12:31 pm
© Reuters.  UPDATE 1-Australia employment dips in Dec, trend still strong

* Dec employment -1,000 vs forecasts of -12,500

* Unemployment stays at 5.8 pct, more full-time jobs added

* Firm underlying trend lessens chance of RBA rate cut

By Wayne Cole

SYDNEY, Jan 14 (Reuters) - Australian employment dipped just a fraction in December, a surprisingly robust result given the exceptional growth over the previous two months and a promising omen for consumer confidence and spending.

Thursday's data from the Australian Bureau of Statistics showed a net 1,000 jobs were lost in December, when analysts had looked for a drop of around 12,500. The dip was minor given a huge 130,000 jobs were created in October and November.

The jobless rate held at a 19-month low of 5.8 percent, when analysts had expected a tick higher, while full-time employment increased a healthy 17,600.

"Undoubtedly this December print was very good," said Peter Jolly, global head of research at National Australia Bank.

"The big point to make is, yes the labour market has improved and the economy is on a more sure footing. We created jobs through 2015 and a range of indicators backed that up."

The ABS has had trouble with its jobs survey in the past that resulted in large revisions in both directions.

Yet other measures of labour demand have also been upbeat, with vacancies at their highest in over three years.

The Reserve Bank of Australia (RBA) has been encouraged enough to resist pressure for a further cut in the 2 percent cash rate, and that should not change with these figures.

Interbank futures 0#YIB: lost early gains on the data and now imply less than a 50 percent chance of a cut by April.

SERVICE PLEASE

A separate series of quarterly figures for the three months to November clearly show where all the jobs are coming from - services.

While miners have been retrenching, the sector at its peak only ever accounted for around 2 percent of all jobs. In all, employment in goods sectors including manufacturing and utilities fell 59,000 in the year to November.

Yet that has been dwarfed by hiring in the services sector which surged by more than 350,000 in the same period.

An aging population is fuelling demand for healthcare, which generated no less than 151,000 jobs in the year to November to be the single biggest employer.

A lower local dollar and the rise of the Asian middle class has been a boon for tourism. Visitors from mainland China rose by a quarter in the year to November to top a million for the first time. They are also big spenders, forking over an estimated A$7.7 billion.

Growth in architectural, engineering and technical services has been concentrated in the populous states of New South Wales and Victoria and owe much to booming home building and a bevy of infrastructure projects.

In all, services to business created 152,000 net new jobs.

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