December's unemployment trend the worst in thirteen years


Total employment tumbled 22.6k in December, and was well below market expectations. It more than reversed a downwardly revised rise of 15.4k in November.

The underlying trend in employment remains subdued and one that deteriorated in December.

The six-month-moving average decline of 4.5k jobs in December is the worst result in almost thirteen years. 

The trend in the more stable component of employment, full-time jobs, also worsened. Full-time jobs fell by 31.6k in December.

It takes full-time job losses to 67.5k for 2013, the worst calendar-year decline in 21 years.

However, jobs growth is a lagging indicator of economic activity. In recent months, the economy has shown signs of improvement.

This improvement is too early to have shown up in the jobs data.

The unemployment rate held steady at 5.8% in December, helped by a drop in the participation rate to a 7½-year low of 64.6%. Had the participation rate held steady at 64.8% in December, the unemployment rate would have risen to 6.1%.

The Reserve Bank has maintained an easing bias and yesterday's labour force data shows it is appropriate to do so.

If jobs growth continues to deteriorate and does not reflect the improvement in economic activity, then another rate cut is possible.

Share Markets:

Disappointing news from US financial stocks led the US market lower overnight. Mixed economic data (see below) added to the decline in risk appetite.

European markets were also softer with the French market down 0.3% and the UK and German markets down marginally.

The S&P retreated from its record high and fell 0.2% while the Dow was down 0.4%.


Modest US inflation numbers saw long bond yields in the US decline five basis points to 2.84% while two year government yields fell just the one basis point to 0.38%.

In Australia, bond yields also declined with the three year bond yield falling nine basis points to 2.90%.

Foreign Exchange: 

The USD index moved a touch lower overnight on mixed economic news allowing the AUD to move up from overnight lows in the US87 cent range.

The AUD has fallen around 10% against the USD since October last year.


Commodity prices were little changed overnight. Both gold and oil edged higher while copper edged lower.

Overnight data was insufficient to sway sentiment decisively one way or the other.


Foreign direct investment rose by 3.3% in the year to December, up from 2.4% year-to-date in November.


Machine orders lifted by 9.3% in November, after only a 0.6% increase in October.  The annual growth rate eased modestly to 16.6%.


Eurozone CPI was confirmed at 0.8% for the year to December, and the core rate unrevised at an annual rate of 0.7%, the lowest since the euro was introduced in 1999.

United Kingdom:

The Royal Institute of Chartered Surveyors (RICS) reported a net balance of 56% of surveyors assessing higher house prices in December, just down from the all-time high of 58% in November.

United States:

US CPI rose 0.3% in December. Energy prices rose 2.1%, after falling in the previous two months, while food continued to rise at a steady modest 0.1% pace.

Apparel rose 0.9%, the first gain since August, medical care was flat for the third month running and rent rose 0.2%. The core rate was 0.1% higher but steady at 1.7% over the year.

The US Philadelphia Fed factory index rose from 6.4 to 9.4 in January, the third consecutive reading below 10, after 5 double digit headlines in the period June to October.

The January result is indicative of moderate rather than strong growth.

The January detail showed orders growth slowing, shipments growth steady and jobs stronger.

The US National Association of Home Builders (NAHB) housing market index slipped from 57 to 56 in January, remaining in the 51-58 range that has prevailed since the middle of last year.

Mum watches court hearing for son accused of stabbing her

Premium Content Mum watches court hearing for son accused of stabbing her

The son faces the serious charge of attempted murder among other offences.

Explained: What’s happening with holiday letting rules

Premium Content Explained: What’s happening with holiday letting rules

Rules come into effect in one area sooner than a neighbouring LGA

David Bowie reworked famous song at Northern NSW property

Premium Content David Bowie reworked famous song at Northern NSW property

A luxury property with an impressive musical secret is on the market