Unemployment In Australia Unexpectedly Declined To 5.7%

Unemployment in Australia declined opposing analyst's expectations as employment change rose more than forecasts, supporting the RBA's decision to raise interest rates for the third straight meeting, amid recovery witnessed in most of economic sectors. Policy makers are working to keep inflation within the desired target, especially that consumer inflation expectation recorded the highest in more than a year in October.

Unemployment in Australia declined to 5.7% in November, compared with 5.8% in October, and it came better than forecasts as unemployment was anticipated to incline to 5.9%.

Employment change came in at 31.2 thousand in November, higher than the previous 27.2 thousand that was revised to 24.5 thousand, while today's reading topped analyst's estimates of 5.0 thousand.

Today's report showed that Australian companies hired 30.8 thousand in full time jobs from a revised 2.9 thousand in October, while the number of workers hired in part time jobs declined to 0.3 thousand following a revised 21.5 thousand.

Moreover, clear signs of recovery witnessed in Australia in the last period, besides increasing primary goods and raw materials prices, helped to raise confidence in the business sector to reach the highest in seven year last month, alongside recovering demand for raw materials like iron ore, coal, natural gas from the Asian region leaded by China.

Rising business confidence along with other signs of recovery, led to increasing job advertisements this week to reach the highest since May 2007 climbing 5.2% in November. About 99.5 thousand of new jobs added in the past three months, helped to see jobless rate declining from the highest level since March 2004.

Now with consumer inflation expectations that came in at 3.6% in October, from a prior 3.2% to reach the highest since October 2008. Today's reading came supporting the RBA's decision to raise borrowing costs by 25 basis points for the third straight meeting making its benchmark reach 3.75%.

It is expected that more rate hikes will be witnessed in the upcoming period alongside clear signs of recovery continuing to appear, that will help the bank to keep inflation within the desired range.

On the other hand, the RBA assistant governor said today he is not worry about increasing carry trades, saying that the reserve bank noticed moderate changes in the local currency, which is not representing much fears. This came after the Reserve Bank of Australia raised interest rates by 75 basis points in three months that boost trader's appetite for risk and lead to more carry trades

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