Australian employment soars 58,600 in October, sends Aussie dollar surging

The housing construction and tourism industries in Australia are soaking up workers.
The housing construction and tourism industries in Australia are soaking up workers.PHOTO: AFP

SYDNEY (BLOOMBERG) - Australian employers added the most jobs since March 2012, pushing the jobless rate lower and suggesting the central bank is unlikely to reduce already record-low interest rates. The currency soared.

Employment rose 58,600 from September, compared to the 15,000 increase forecast by economists.

The jobless rate dropped to 5.9 per cent from 6.2 per cent; economists had predicted 6.2 per cent.

Full-time jobs rose by 40,000, while part-time employment increased by 18,600. The participation rate, a measure of labour force in proportion to the population, rose to 65.0 per cent from 64.9 per cent. Economists had predicted 64.9 per cent.

The report adds to impetus in housing construction and tourism industries that are soaking up workers while consumer confidence increases. The data also adds weight to the central bank's view that the economy's prospects have improved and have not yet needed a further reduction in interest rates.

"Employment growth has been strengthening in the interest- sensitive service states of New South Wales and Victoria, helping offset the unemployment rate creeping higher in mining-dominated Western Australia," Ms Katrina Ell, an economist at Moody's Analytics in Sydney, said before the release.

The Australian dollar jumped more than half a US cent and traded at 71.37 US cents at 11.50am in Sydney, from 70.65 US cents before the data was released.

The Aussie also jumped against the Singapore currency. One Singdollar was trading at A$0.9883 as of 9.12 am, from its close of A$0.9970 on Thursday.

The S&P/ASX 200 Index maintained declines after the report. The gauge sank 0.6 per cent to 5,093.80 as of 11.37am in Sydney.

Australia is facing the effects of a fall in prices for its key commodity exports. The central bank, which cut rates twice this year, is banking on improving consumer confidence to spur spending and encourage business investment.

Consumer sentiment rose 3.9 per cent this month as optimists outweighed pessimists, even as business confidence remains subdued.