By James Glynn
SYDNEY--Australia's economy continued to create jobs at a strong rate in December, raising doubts about the Reserve Bank of Australia's ability to deliver an interest-rate cut next month.
Employment surged by 56,300 in December, nearly four times what economists had expected.
Still, the unemployment rate rose to 4.0% in December from 3.9% in November as participation in the job market jumped.
The participation rate rose 0.2 percentage points to a record high of 67.1% in December, 0.5 percentage points higher than a year ago, and 1.6 percentage points higher than March 2020, the Australian Bureau of Statistics said Thursday.
The solid employment growth again underscores the fact that despite a sharp slowdown in the economy and the persistence of elevated interest rates, firms continue to hire new workers.
The data casts a cloud over the RBA's ability to cut interest rates next month, with fourth-quarter inflation data at the end of this month now needing to show a significant improvement to bring about a reduction in the official cash rate, the central bank's first for the cycle.
The number of employed people grew by 0.4% in December 2024, slightly higher than the average monthly rise of 0.3%, the ABS said.
The employment-to-population ratio rose 0.1 percentage point to a new record of 64.5%, which is 0.5 percentage points higher than a year ago and 2.3 percentage points higher than before the pandemic.
Seasonally adjusted monthly hours worked increased by 0.5%, which was higher than the average monthly increase of 0.3% in 2024, the data showed.
Meanwhile, the youth underemployment rate was at 14.1% in December, remaining higher than that of the overall population, but well below March 2020, when it was 19.1%, the ABS said.
Write to James Glynn at james.glynn@wsj.com; @JamesGlynnWSJ
(END) Dow Jones Newswires
01-15-25 2015ET