Unemployment figures remained unchanged in December at at stable 5.8 per cent, says HSBC Global Research.
"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."
SUBSCRIBE TO THE IFA DAILY BULLETIN
- 08:51ANZ to suspend asset finance lendingBy Staff Reporter
- 08:46CommInsure partners with industry fund on claimsBy Staff Reporter
- 08:43ASIC disqualifies jailed SMSF auditorBy Staff Reporter
- 04:08Australian advisers unprepared for exitBy Killian Plastow
- 16 Mar 2018CBA CEO pushed for FOFA extensionBy James Mitchell and Aleks Vickovich
- 16 Mar 2018CPA dealer group clashes with FASEA requirementsBy Katarina Taurian
- view all