Australian employers added fewer workers than economists forecast in December as a stronger currency and higher borrowing costs slowed the economy. The number of people employed rose by 2,300 from November, the statistics bureau said in Sydney today, less than the median forecast for a 25,000 increase in a Bloomberg News survey of 17 economists. The jobless rate fell to 5 percent from 5.2 percent a month earlier as the participation rate dropped. Reserve Bank of Australia Governor Glenn Stevens left interest rates unchanged at 4.75 percent last month, saying some indicators suggest “a more moderate pace of expansion” in employment. The country’s currency dropped after the report, and flooding in Queensland state may reduce economic growth this quarter. The level of job growth in priors months looked “unsustainable over the medium term,” Westpac Banking Corp. economists, who forecast an increase of 12,000 workers, wrote in a Jan. 10 research report. “The pessimism in retailing should also weigh in December.” The Australian dollar fell after the report, trading at 99.26 U.S. cents as of 11:33 a.m. in Sydney from 99.66 cents in New York yesterday. Full-Time Jobs The number of full-time jobs advanced by 1,700 in December and part-time employment rose by 600, today’s report showed. Australia’s participation rate, which measures the labor force as a percentage of the population over 15 years old, fell to 65.8 percent in December from a revised 66 percent a month earlier, it showed. The local dollar last year surpassed parity with its U.S. counterpart and on Dec. 31 touched the highest level since being floated in 1983. A report last month showed the economy expanded at the slowest pace in almost two years in the third quarter. The RBA has raised its overnight cash rate target seven times since October 2009, in contrast with the U.S. Federal Reserve’s policy of a benchmark rate near zero since December 2008. That divergence contributed to a 14 percent increase in the local dollar versus the U.S. currency last year. Australian job advertisements rose in December for an eighth month, advancing 2 percent from November, when they increased a revised 3 percent, according to an Australia & New Zealand Banking Group Ltd. report released in Melbourne this week. Stevens said following last month’s decision that “after the significant decline last year, growth in wages has picked up somewhat, as had been expected. Some further increase is likely over the coming year,” he said. To contact the reporter for this story: Michael Heath in Sydney at mheath1@bloomberg.net To contact the editor responsible for this story: Stephanie Phang in Singapore at sphang@bloomberg.net

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