ASX 200 finishes lower after jobless rate falls unexpectedly

The ASX has fallen to a three-week low on Thursday as markets digested better than expected unemployment figures.

The ASX200 fell in a broad market sell-off due to stronger than expected job figures. Picture: NewsWire / Max Mason-Hubers

The Australian sharemarket retreated on Thursday while the Aussie dollar bounced from a 13-month low on the back of a shock improvement in the unemployment rate in November.

The drop in the jobless rate from 4.1 per cent to 3.9 per cent in November has strengthened the likelihood of rates holding when the Reserve Bank board next meets in February.

The ASX 200 index was down 0.28 per cent to 8333.30 points after hitting a three-week low of 8326.6 as hopes of an early rate cut in February faded because of the strong jobs data.

The broader All Ordinaries fell by 23.50 points, or 0.27 per cent, to close at 8586.30 points.

The ASX200 fell in a broad market sell-off due to stronger than expected job figures. Picture: NewsWire / Max Mason-Hubers

The Aussie dollar is stronger near US64.05c. The Aussie dollar traded at a 13-month low on Thursday morning as investors were cautious about Australia’s economic future.

The sell-off was broad based with nine of the 11 industry sectors ending Thursday’s trading in the red.

CBA’s chief economist Gareth Aird said the solid growth in Thursday’s unemployment numbers casted doubt over a rate cut in February, but the bank still thinks rates will be cut when central banks meet for the first time in 2025.

“Taken at face value the data indicates that the labour market is not loosening despite well below‑trend GDP growth and forward indicators of labour demand all consistent with a softening labour market,” he said.

“Indeed the labour market data continues to defy the signal coming from GDP growth and other higher frequency activity indicators.”

IG market analyst Tony Sycamore said Australia’s jobs numbers dented hopes for an RBA rate cut in February, with cash markets going from a 63 per cent chance of a rate in February to less than 40 per cent.

The likelihood of a rate cut in February fell to just 40 per cent following Thursday’s job figures. Picture: NewsWire / Max Mason-Hubers

It was a mixed day for the big four banks on news rates could be held higher for longer. Westpac shares slid 0.50 per cent. CBA traded flat at $157.52 a share, while shares in ANZ n and NAB rose 0.10 and 0.08 per cent respectively.

Afterpay’s parent company Block traded up 4.42 per cent to $154.21 a share, while Zip grew slightly trading up 0.69 per cent to close trading out at $2.93.

In corporate news, shares in Qantas jumped during the afternoon’s session of trading despite a new partnership between Virgin Australia and Qatar Airways which aims to undercut the airline.

Qantas closed trading at $9 up 1.35 per cent. The national airline is also facing maintenance engineers walking off the job on Friday through the weekend, which coincides with the start busy Christmas travel period.

Australian Manufacturing Workers Union secretary Steve Murphy said workers had “no other choice now but to take industrial action to bring Qantas back to the bargaining table”.

“Qantas is to blame if there’s any disruption to commuters over the holiday period,” Mr Murphy said.

The weakest performing stock on the ASX 200 was Ventia Services, with investors selling on the news it is facing action from the ACCC. Ventia shares fell 22.56 per cent during the Thursday’s trading.

The ACCC has started civil proceedings in the Federal Court against Ventia and two of its employees for alleged price fixing relating to estate maintenance and operation services for the Department of Defence.

Originally published as ASX 200 finishes lower after jobless rate falls unexpectedly