Australian labor market seen shifting towards service-based activity

Australia's labor market witnessed robust employment progress in recent months; however, employment was flat in December as it dropped by 1,000 positions after posting nearly 130,000 job gains in the prior two months. The jobless rate surprisingly was firm at 5.8 percent rather than rising to 5.9 percent as expected by the markets. The aggregate hours worked across the labor force also increased, showcasing a strong result in the context of recent outcomes.

However, the economy is unlikely to continue delivering employment gains as strong as those seen in the previous quarter. The economy is seen slowly shifthing towards more service-based activity, which is labor intensive than mining output.

"For the RBA, we think officials likely will take the decent December jobs report in their stride, content that the weaker AUD is helping to ease monetary conditions" - JP Morgan