Australia’s Unemployment Rate Continues Steady Rise
The jobless rate climbed to 3.7% in October from 3.6% in September, despite employment jumping by 55,000 over the month
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SYDNEY—Australia’s unemployment rate continued to rise in October, potentially ruling out a further hike in interest rates in December.
The jobless rate climbed to 3.7% in October from 3.6% in September, despite employment jumping by 55,000 over the month, the Australian Bureau of Statistics said Thursday.
The rise in the unemployment rate was expected by economists, but the jump in employment was more than twice the consensus estimate for a 20,000 increase.
The labor force participation rate rose to 67.0% in October from 66.8% in September, the ABS said.
The solid gain in employment in October follows news on Wednesday that wages grew at their fastest pace in more than a quarter of a century in the third quarter as a big rise in the minimum wage helped drive broad strength in new wage agreements.
Still, neither the employment gains nor the rising momentum in wages are likely to be enough to spark a further rise in interest rates at the RBA’s next policy meeting in early December.
The central bank is likely to look at the level of the official cash rate again in February when it reviews its economic forecasts and has seen another quarter of inflation data.
The RBA raised interest rates last week for the first time since June and left open the prospect of further increases if inflation pressures remain resilient. The central bank also revised up its forecasts for inflation in 2024 and 2025.
“It’s a very solid jobs report, highlighting continued tightness in the labor market and illustrating the dilemma the RBA faces as it looks to end its rate hike cycle in line with its global central bank peers,” said Tony Sycamore, market analyst at IG.
“While we don’t think today’s jobs [data] will prompt the RBA to raise rates next month, the RBA will need to see labor market and inflation data ease in the coming months to avoid having to raise rates early in 2024,” he added.
The large increase in employment in October followed a small increase in September of around 8,000 people, the ABS said.
The annual growth rate in hours worked fell to 1.7% in October, down from growth of around 5.0% in the middle of the year, showing that the job market is slowly losing momentum.
The underemployment rate remained at 6.3% in October, the ABS said. While this was 0.4 percentage points higher than October last year, the result was still around 2.4 percentage points lower than before the Covid-19 pandemic.
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Pinterest shares tumbled after the company projected that revenue growth would slow in the first quarter, amid an advertiser pullback that weighed on its fourth-quarter earnings.
Shares slid 18.5% to $15.10 in after-hours trading after closing the market session down 2.9% at $18.54.
Pinterest reported a 14% increase in fourth-quarter revenue to $1.32 billion, up from $1.15 billion a year earlier, but short of analysts’ estimate of $1.33 billion, according to FactSet. The company posted 17% revenue growth in the third quarter.
The company expects growth to decelerate further in the current first quarter, projecting growth between 11% and 14%. It’s forecasting revenue between $951 million and $971 million.
Chief Executive Officer William Ready said the company needs to broaden its revenue mix and accelerate sales going forward.
“We are not satisfied with our Q4 revenue performance and believe it does not reflect what Pinterest can deliver over time,” he told analysts on a call Thursday. “We are moving with urgency to return over time to the mid-to-high-teens growth, or better than what we have been consistently delivering.”
Pinterest on Thursday recorded a profit of $277.1 million, or 41 cents a share, compared with its profit of $1.85 billion, or $2.68 a share, a year earlier. The $1.85 billion profit in 2024 included a $1.6 billion benefit from deferred tax assets.
Stripping out certain one-time items, Pinterest logged adjusted earnings of 67 cents a share, in line with analyst expectations, according to FactSet.
Ready said the company continues to see headwinds from larger retailers pulling back on advertising spending to protect their margins amid the impact from President Trump’s tariffs.
“We saw continued softness from this cohort of large retailers,” Ready said. “While we see opportunity over the long term, the near-term outlook for this cohort on our platform remains pressured given these headwinds.”
Ready said the company has expanded its footprint among mid-market and small-to-medium business advertisers, as well as international businesses. Still, he said Pinterest had a ways to go to offset the headwinds from larger advertisers, which may become even more pronounced in the current quarter.
Chief Financial Officer Julia Donnelly added that the company is looking to increase its investments in sales and research and development related to artificial-intelligence following the launch of its restructuring effort in January. Pinterest said last month that it would cut about 15% of its workforce, or approximately 700 jobs.
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