Unemployment in Australia dropped 0.1% to 4.2% in September, the lowest level in more than 30 years, the result of a lift in part-time employment.
Figures released today show that more than 30,000 people started new part-time jobs in September, more than making up for a 17,200 drop in full-time employment
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The 13,000 net job rise result is slightly lower than the 20,000 new jobs expected by the market, but is still indicative of a strong economy that will continue to hit up against capacity constraints.
The picture of an economy continuing to gather pace is also painted by the 4.6% increase in consumer inflationary expectations revealed in figures released by Westpac and the Melbourne Institute today.
The 4.6% result is well up from last month’s 3.1% result and is the highest median since October 2005.
The proportion of people expecting inflation within the Reserve Bank’s 2–3% target band fell to 14.3% from 18.7% last month, while the proportion expecting inflation above the band rose to 63.7% from 54.7%, above its 12 month average of 58.6%.
Even more concerning, according to Westpac economist Anthony Thompson, is a jump in the median inflation expectation of managers and professionals (a group likely more exposed to price setting decisions) to 5.2%, a record high for the survey.
Today’s results will further fuel expectations of an interest rate rise sometime around the end of this year, with market odds currently at 45% for a rise in November and 71% for December.
On the markets, the S&P/ASX has continued to rise this morning after yet another record close of 6738.3 yesterday; at 12.30 pm it was up 0.4% to 6765.8, while the Australian dollar was down slightly on yesterday’s US89.87¢ close to US89.75¢.