Australia jobless rate hits 5.3%

Sydney: Australia's unemployment rate unexpectedly rose to 5.3 per cent in November, data showed yesterday, with the number of people in work falling as businesses cut costs.

The Australian Bureau of Statistics said the economy saw 6,300 jobs lost in the month, driven by a decrease in full-time employment, against economists' expectations for 10,000 new positions.

It compares with a 5.2 per cent jobless rate in October.

The Australian dollar dipped on the report from around 102.85 US cents, but recovered to be trading at 102.70 US cents late in the day.

AMP Capital Investors chief economist Shane Oliver said the jobless figures showed the labour market was softening.

"The economy outside mining has been quite weak so companies have had to start laying people off to get their costs under control," he said.

Australia's economy grew 1.0 per cent in the three months to September, according to data released on Wednesday, but activity was muted or declining in all but the nation's mining-driven states.

Interest cut

In a bid to stimulate spending, the Reserve Bank of Australia cut interest rates for the second time in as many months on Tuesday with a 25-basis-point reduction to 4.25 per cent.

Treasurer Wayne Swan said he was not worried by the uptick. "Well, we have a very low level of unemployment in Australia, a very low level compared to other countries. We've got a five in front of our level of unemployment; most other countries have double that rate," he said.

But Macquarie Group senior economist Brian Redican said he did not expect employment to recover any time soon with the Eurozone debt crisis weighing on sentiment, and tipped another interest rate cut in February.

"These kind of [jobs] numbers [and] the possibility of a very low inflation rate in the fourth quarter would certainly all be consistent with the Reserve Bank trimming rates once again," he said.