Unemployment expected to rise to 5.9%

The jobs market is expected to have weakened in December, after enjoying the best two months of employment growth in almost 28 years.


The number of Australians with a job is forecast to have fallen by 5,000 in December, and the unemployment rate is expected to have risen to 5.9 per cent, according to an AAP survey of 12 economists.

In November, jobs growth was 71,400, after a 56,000 rise in October, the strongest two-month period of employment growth since the 1980s.

That sent the unemployment rate to its lowest level in almost two years, to 5.8 per cent in November.

The Australian Bureau of Statistics will release its December employment report on Thursday.

JP Morgan chief economist Stephen Walters said the November figures were exaggerated by the ABS survey methods but added that the employment market is still strong.

“Recent labour force surveys have looked too good to be true,” Mr Walters said.

“Although we have become increasingly optimistic on the labour market outlook, given the upbeat signals from job ads, business surveys and government welfare data, the official data still appear too firm relative to gross domestic product growth.”

The ABS said last month that that the current group of households it surveys for its labour force report have a higher participation rate in the jobs market, which could inflate the size of the jobs growth figure.

The latest ANZ job advertisements survey, a key indicator of employment growth, showed the number of jobs advertised in December fell 0.1 per cent, following four consecutive months of rises, seasonally adjusted.

In 2015, the number of jobs ads grew by 10 per cent, just short of the above 12 per cent growth experienced in each of the previous three years, figures from ANZ show.

ANZ chief economist Warren Hogan said that has helped the unemployment rate fall below six per cent and expects it to stay there in the coming months.

“The solid trend in job advertising bodes well for the near-term employment outlook,” he said.

“For the Australian economy the major risks still appear to be external, as is often the case. Only time will tell whether recent ructions in China are indicative of broader challenges in that economy.”


* Unemployment rate to rise to 5.9pct in Dec, from 5.8pct in Nov

* The number of people with jobs tipped to fall by 5,000

* Jobs growth forecasts ranged from a fall of 25,000 to a gain of 25,000

* Participation rate forecast to fall to 65.2pct, from 65.3pct

(Source: AAP survey of 12 economists)