Australian employers boosted payrolls more than economists forecast in October and the unemployment rate unexpectedly held as the nation weathered a global slowdown, sending the local currency higher.
The number of people employed rose by 10,700 after a 15,500 gain in September, the statistics bureau said in Sydney today. That compares with the median estimate for an increase of 500 last month in a Bloomberg News survey of 26 economists. The jobless rate was unchanged at 5.4 percent, compared with expectations for a rise to 5.5 percent.
The data highlight the resilience of the world’s 12th-largest economy, which expanded at an annual pace of about 4 percent in the first half of the year, driven by resource investment. Reserve Bank of Australia Governor Glenn Stevens cut interest rates last month, bringing to 1.5 points the reduction since Nov. 1 last year, before holding this week as the global economy stabilizes and inflation picks up.
The resource investment boom is “providing a sort of buffer” for the nation’s job market, said Tom Kennedy, an economist in Sydney at JPMorgan Chase & Co., which predicted a 12,000 gain. Today’s report “fits with the picture of the RBA looking to hold their ammunition a bit,” he said.
The number of full-time jobs increased for a fourth straight month, the longest streak of gains since 2010, advancing by 18,700 in October. Part-time employment fell by 8,000, today’s report showed.
The participation rate, a measure of the labor force in proportion to the population, dropped to 65.1 percent in October from 65.2 percent a month earlier, it showed.
The Australian dollar gained, buying $1.0421 at 1:18 p.m. in Sydney compared with $1.0393 before the data were released. Traders are pricing in a 58 percent chance the RBA will lower the benchmark rate by a quarter percentage point to 3 percent at its December meeting, swaps data compiled by Bloomberg show.
The Australian dollar has risen 1.5 percent since the central bank last cut rates in October, the only gainer during that period among Group of 10 currencies, Bloomberg data show.
Resource investment to meet Chinese demand and foreign investment funds seeking a haven are underpinning the local currency, which closed above parity with the U.S. dollar for all but 23 days this year.
Australia has “still got the multi-speed nature of economy playing out,” Kennedy said. “While non-mining exposed sectors such as retailing and manufacturing have been quite weak, you’ve still got the resource boom and the investment and all the extra capital that brings with it.”
Today’s report showed New South Wales and Victoria, the nation’s most populous states, led the gains with a total of 16,000 jobs added. Western Australia, a center of the nation’s mining boom, gained 1,900, while Queensland, another resource state, lost 1,400 as a new government there cuts public-service workers.
In contrast to Australia’s labor-market strength, New Zealand’s unemployment rate unexpectedly rose last quarter to a 13-year high, a government report showed earlier today.
New Zealand’s jobless rate jumped to 7.3 percent from 6.8 percent in the second quarter, the report showed. That’s the highest since the first quarter of 1999 and was more than the 6.7 percent median estimate in a Bloomberg survey of economists.
A quarter of Australia’s exports, or about 5 percent of gross domestic product, goes to China, and 60 percent of those shipments are iron ore. Data this month showed China’s non-manufacturing industries rebounded from the slowest expansion in at least 19 months, indicating the world’s second-biggest economy is recovering from a seven-quarter slowdown.
Australia has added 45,000 jobs in the mining industry in the year through August, while construction has lost 70,000 over the period, government data show, highlighting the two-speed nature of the nation’s economy.