Australia’s unemployment rate fell in November, sparking questions over rates

ABC NEWS (Australia)

There’s some good news on Australia’s jobs market, with unemployment unexpectedly falling last month. But economists say it does take pressure off the Reserve Bank to lower interest rates, reducing the chances of a February rate cut.

Transcript

00:00While some businesses are hiring new staff, there are no vacancies here.

00:07We had three casuals with us when we went into Christmas last year and we had to let

00:11all of them go in the new year because we just couldn't afford it.

00:15So there's two of us that own the shop and we're pretty much doing all of the hours.

00:18The unemployment rate unexpectedly fell in November to 3.9 per cent.

00:24It was partly due to people leaving the workforce, which pushed the participation rate down by

00:30and the creation of nearly 36,000 jobs.

00:34This is a remarkable achievement when you consider some of the global economic forces

00:39that we've had to deal with here in Australia and in the context of a slowing economy with

00:44a labour market that was expected to soften.

00:47Economists say a lot of the jobs growth is in the public sector.

00:50The RBA lifted interest rates in order to slow the economy down and get inflation to

00:54fall and so you've seen that reflected in weaker private sector hiring.

00:58The Reserve Bank had forecast the unemployment rate would rise to more than 4 per cent by

01:04the end of the year.

01:06The unexpected fall in the jobless rate may not be good news for borrowers holding out

01:11for a February rate cut.

01:14The RBA is unlikely to be able to cut interest rates until we think the middle of next year.

01:19We don't think they're likely to be cutting in February and today's numbers certainly

01:22bolster that case.

01:24High interest rates mean Rachel Damora's customers have less to spend.

01:29I want 2024 to be over because I think 2025 is going to be a new start and I'm fingers

01:34across it's going to get better.

01:35Christmas, a time of hope.

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