The likelihood of an interest rate drop in 2024 is looking more certain, following the release of the latest unemployment figures.
According to the Australian Bureau of Statistics the unemployment rate remains at 3.9%, seasonally adjusted, although there were 65,100 fewer people employed at the end of December.
The ABS says the unemployment rate did not change as it adjusted its participation rate during the period.
The Federal Government’s mid-year budget update in December had predicted that the unemployment rate would climb.
The figures have the many economists predicting there will be no interest rate rises in the first half of 2024.
IG market analyst Tony Sycamore says the labour market is cooling, and following the recent softer than expected inflation figures he believes rate cuts are on the horizon.
“December quarter inflation data, scheduled for release on January 31, will determine whether expectations of two 25 basis point RBA rate cuts become three in 2024,”he says.
ABS head of labour statistics David Taylor says the number of employed people is still 52,000 higher than September.