The Australian unemployment rate has fallen to 5.2 per cent in November as a surprisingly strong economy added 13,900 jobs in the month.
The unemployment rate was down from 5.4 per cent from October, and well below economists' expectations of 5.5 per cent. It was the lowest jobless rate since August, according to the ABS.
The participation rate - the percentage of people either in work or looking for work - remained steady at 65.0 per cent.
Full-time employment decreased by 4200 jobs to 8,132,200, while part-time employment increased by 18,100 to 3,414,200. Total employment rose to 11.546 million, as unemployment decreased by 16,300 to 637,400.
The dollar jumped on the news, gaining about a quarter of a US cent to $US1.0478.
Labour market still 'soft'
But JPMorgan economist Tom Kennedy said the labour market was ‘‘quite soft’’ despite the fall in the unemployment rate, as participation remained weak.
"The reason the unemployment rate moved lower is because we had upwards revisions in the prior month for participation, and as a consequence, participation has actually decreased in this report," he said. "So effectively, there were less people looking for work in November, and because the economy added a very modest amount of jobs, that was enough to see the unemployment rate move lower.
"This is the second weakest reading we have had since about 2007 so that’s really saying that the underlying message is the labour market is quite soft."
Mr Kennedy said he expected firms to lean more towards part-time employment in the coming months.
The increase in part-time employment reversed last month's strong growth in full-time employment. Mr Kennedy said while this month's figures did not necessarily represent a trend, he expected firms to lean more towards part-time employment in the coming months.
"I would say that considering what is going on domestically, I would expect the composition of employment to lean more towards part-time over the coming months as firms prefer to hire part-time labour, rather than increasing their overheads dramatically by committing to full-time labour," he said.
The doomsters have got it wrong - again.
Still case for a rate cut
RBC strategist Michael Turner said the fall in unemployment was a big shift from the rises over the past few months.
"But we see the data as still broadly pretty soft across the economy, so we still see a case for lower rates," he said.
The Reserve Bank of Australia on Tuesday cut its key cash rate by 0.25 percentage points to 3.00 per cent, the lowest setting in decades and matching the low hit during the peak of the global financial crisis in 2009.
Workplace Relations Minister Bill Shorten said in a statement following the ABS release that 843,800 jobs, about 460 jobs per day, had been added since his Labor government took office in 2007.
Mr Shorten said the figures were an "outstanding achievement", despite the global economic turmoil and uncertainty, but added that "we cannot be complacent for a moment".
Bucking the trend
Today's fall in the jobless rate comes as a surprise as several indicators have been pointing to weakness in the labour market.
ANZ's job ads series fell for an eighth month in November, and surveys of industry also point to a soft labour market. However, the Department of Employment's leading indicator of employment rose for a fifth month in December and it has a respectable track record in anticipating upturns in hiring.
The RBA expects the unemployment rate to rise only "a little further" in coming months, though many analysts see a risk it could go higher. A move towards 6 per cent would greatly add to the case for further cuts in interest rates.
The Australian economy is holding up well despite a very uncertain global environment, CommSec economist Savanth Sebastian said after the release of the jobless numbers.
"While there are a number of high profile company failures and job losses, beneath the surface small and medium-sized business are still keen to put on more staff," he said. "The anecdotal evidence is that it is hard to attract and retain staff and today’s jobs figures back up these observations.
"The doomsters have got it wrong - again."
Michael Rafferty of the University of Sydney’s Workplace Research Centre said the aggregate monthly hours worked - which rose by 1.3 million last month - was also a significant indicator.
‘‘What I think we are seeing then is there’s been a bit of a pick up in employment, but more importantly, people that are in work are working more hours, which I think is surprising, because we’ve heard that a lot of businesses are doing it tough," Dr Rafferty said.
"There’s a mood in the country where people are uncertain and not confident of the future because of everything that’s happening, but the labour force figures don’t really tell the same story just yet."
Dr Rafferty said the negative mood in the labour market despite the employment figures stemmed from a fear of becoming unemployed.
"I think that what’s happening is that people are pessimistic despite the reasonably buoyant labour market and the reason is that people are finding it hard to get by. And I think they are worried that if they were to become unemployed, lots of things could unravel for them.
"There’s a genuine fear because people are struggling to make ends meet. The labour market aggregate figures are missing that story that people are feeling more precarious."
Unemployment rate (per cent, seasonally adjusted)
November: 5.2 per cent
New jobs added