HSBC said despite revisions to its initial expectations the Australian employment market has grown more than it anticipated reaching 43,000 over the month of November.
“Employment increased by [more than 42,700] (market and HSBC expected [15,000]), although the previous month's increase was revised down from [24,000 to 14,000],” HSBC said.
HSBC pointed out the stronger rate of employment growth is encouraging and if it were to continue it should see the unemployment rate, which currently sits at 6.3 per cent, stabilise.
“The official labour market data showed an encouraging lift in employment growth in November, with the most jobs added in a month since March 2012,” HSBC said.
“Looking at a range of other labour market indicators does suggest that conditions are stabilising, with employment conditions and job advertisements lifting gradually over 2014,” it said.
“We believe that conditions are likely to continue improving over 2015, making further interest rate cuts unnecessary,” HSBC said.
However, HSBC highlighted that trend employment growth has remained subdued as the economy has only added an average of 13,000 jobs a month over the past six months.
“That is not enough to keep up with population growth. The slow pace of the economy's rebalancing has been evident in the labour market, where unemployment has continued to rise fairly steadily,” HSBC said.
“If job gains like those reported in November continue, though, the unemployment rate should start to stabilise,” it said.
