HSBC Global Research said the unemployment remained unchanged at 5.8 per cent in December, following strong job numbers in both October and November.
“Growth is rebalancing and it is creating jobs, mostly in services sectors,” HSBC stated.
The market had expected employment to fall by 10,000 – with HSBC expecting a 25,000 fall – but positively surprised by falling 1,000.
“Today’s labour force numbers were expected to show a correction for December, following two strong prints in October and November. As it turned out, the correction was only small with the survey showing a fall of [1,000] jobs,” HSBC stated.
However, despite the optimism inferred from December’s jobs numbers, AMP Capital chief economist Shane Oliver said the unemployment rate will eventually float back towards 6.3 per cent this year.
Additionally, Mr Oliver said the new figures create a risk when it comes to monetary policy.
“The RBA will likely be cautious in interpreting recent job strength, but the danger is that it might encourage it to ‘chill out’ for too long on rates,” he said.
Mr Oliver remained sceptical towards the official employment numbers. He said the total growth in employment of 301,300, or 2.6 per cent, in 2015 is “unbelievably” strong for an economy growing at 2.5 per cent.
“As such I remain of the view that statistical issues are exaggerating the jobs numbers and depressing the reported level of unemployment,” he said.
HSBC noted that growth and inflation are expected to remain below trend in 2016, challenging the RBA.
“Low inflation leaves the RBA with scope to cut further if required and our central case has another 25 [basis points] cut in the first half of the year.”
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