Australia continues to take one step forward, two steps back on the job front by losing 22K jobs in December marking the worst loss of full-time jobs in 21 years. The statistics bureau caught economists off-guard as they were expecting a gain of 10K jobs. The unemployment rate was flat at 5.8 percent, and the participation rate fell to an eight-year low.
The Australian dollar hit new lows against the greenback as odds of another rate cut increased with the demoralizing jobs report. The Reserve Bank of Australia (RBA) have kept the benchmark cash rate at all-time lows at 2.5 percent, but this could change things. “The figures were a little bit nastier than expected,” said Alex Joiner, an economist at Bank of America Merrill Lynch. Joiner said the speculation of a rate cut was “premature” because the RBA has not cut rates soley on an unemployment report; but, let’s face it: the Australian economy has suffered a great deal after the mining boom came and went and has had trouble finding its footing.
The 22K jobs lost last month was made up by a 31,600 decline in full-time employment and a rise in part-time employment by 9K jobs. The Australian labor force participation rate almost rivals that of the US, standing at 64.6 percent.
Job gains in November were revised down from a gain of 21K to 15,400. In 2013, Australia lost 67,500 full-time jobs marking it the worst year for employment since 1992, when over 88K jobs were lost after the last recession.