Another 25K Job Gain Expected Holding UE Rate At Historical Low

The labour market report for December is published today and is expected to show that conditions remain very tight. If analysts are correct, today’s data are unlikely to alter the RBA’s position whereas January 25’s CPI and the February 22 WPI are likely to be key to the rate outlook.

• In the year to November Australia added 482.4k jobs, bringing the employment to population ratio to its series high (starts in 1978). Employment rose a higher-than-expected 64k in November and analysts expect a further 25k gain in December.
• There is quite a range of estimates for employment from -15k to +40k. Only two economists expect a contraction and 10 are projecting a gain above the median 25k.
• Economists expect the unemployment rate to be steady at 3.4% but 9 analysts expect it to tick up to 3.5% and 2 expect it to fall to 3.3%. It is currently at its historical low.
• The participation rate is expected to be unchanged at 66.8% with the range of estimates between 66.6% and 66.9%.