Surprise drop in unemployment

By Your Mortgage

Figures released by the Australian Bureau of Statistics today revealed that unemployment fell by 0.1% in seasonally adjusted terms for the month of September.

The official unemployment rate had been steady at 5.8% throughout June, July and August, but slipped to 5.7% in September, the ABS said. Economists had widely expected a rise to 6%.

The statistics appeared to reinforce the RBA's view that the economy was in recovery and validate its decision to raise interest rates by 25 basis points this week. Reserve Bank governor Glenn Stevens said in his monetary policy statement on Tuesday that unemployment had not risen as far as had been expected. That fact was cited as one of the reasons for kicking off a cycle of rate tightening.

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