Australian economy adds twice as many jobs as expected as unemployment rate rises to 3.7% | Unemployment

Australia’s employers added more jobs than expected last month as a sluggish economy contributed to a tight labor market – leaving open the possibility of another Reserve Bank interest rate hike.

The unemployment rate rose to 3.7% in October, with a net 54,900 jobs added for the month, the Australian Bureau of Statistics said on Thursday.

Market economists had forecast the unemployment rate to rise to 3.7% from 3.6% in September, but only 24,000 jobs would be added.

The figures follow an ABS release on Wednesday that showed the wage price index rose 1.3% in the September quarter, marking the biggest quarterly increase in the survey’s 26-year history. The 4% annual pace was over 14 years.

Strength in the underlying economy prompted the RBA to raise its forecast for GDP growth last week. It also predicts the unemployment rate will rise to around 4.3% by next June, down from the previously forecast peak of 4.5%.

Ahead of Thursday’s labor market figures, investors had pegged the chance of the RBA following through with an interest rate hike this month at less than 10% in December. They also bet the odds of an interest rate hike next year being less than a 50-50 chance, according to the ASX.

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