Jobless rate rises slightly in December
The case for an interest rate cut next month has been partially bolstered by a slight increase in the national jobless rate.
The nation's unemployment figure rose from 5.2 per cent in November to 5.3 per cent in December, while WA's jobless rate rose from 4.1 per cent to 4.3 per cent.
The Australian Bureau of Statistics reported today the nation lost 5500 jobs in December.
The result was well below market consensus of a 4500 gain in total employment.
While the number of part-time jobs rose 8300, full-time positions decreased by 13,800, seasonally adjusted.
In WA, the number of people unemployed rose from 56,200 to 59,400.
National Australia Bank was forecasting a 5000 decline in total national employment and its group chief economist Alan Oster said the data showed the labour market was soft.
"Generally the message is that the labour market whilst it is OK is softening and therefore unemployment is starting to go up," Mr Oster said.
The ABS said the unemployment rate was at 5.4 per cent in December, up 0.1 percentage points from an upwardly revised 5.3 per cent in November.
The Reserve Bank of Australia has delivered 175 basis points of interest rate cuts since November 2011, sending the cash rate to three per cent and levels not seen since the global financial crisis.
The RBA's next meeting is on Tuesday, February 5.
Mr Oster said the unemployment data had raised market expectations of more interest rate relief from the RBA in February.
However, the release of the December quarter consumer price index report due on January 23 would have a bigger bearing on the central bank's thinking.
"This is soft, so this would basically mean that the market would price in a bigger chance of a rate cut," Mr Oster said.
"But I think you really need a low CPI before they actually pull the trigger."
The Australian dollar reached negatively to the jobs numbers.
The currency dropped to 105.36 US cents after the data was released at 8.30am, down from 105.64 US cents shortly before.
In December 2012, Santos announced plans to cut 100 jobs in South Australia, while Boral shed 90 positions at a Victorian cement plant.
Announcements of job losses have continued in January, with Boral cutting 700 management and office positions BlueScope reducing production in Victoria at a cost of 170 jobs.
But Commsec chief economist Craig James said the jobs figures showed the jobs market was relatively stable.
"The job market has defied the doomsters yet again, clearly we are not seeing a huge drop in jobs," Mr James said.
"I think what is pretty clear is that the jobs market is relatively stable, the unemployment rate has been holding around the five and a quarter to five and a half per cent mark for quite some time now," he said.
Mr James said the figures showed employers were still hiring staff.
"They are still taking on staff but they are taking them on cautiously, preferring part time workers to full time workers."
He said the figures meant a February rate cut was less likely.
"The RBA would be quite encouraged the jobs market is remaining fairly resilient."
