By Ambar Warrick 

Investing.com– Australia’s job market grew more than expected in November, data showed on Thursday, as increasing wages, a record-high participation rate and high demand for labor kept employment conditions tight. 

The grew by 64,600 to 13.7 million in November, more than expectations for growth of 19,000 people, data from the Australian Bureau of Statistics (ABS) showed. This pushed up the to a record-high 66.8%, putting it comfortably at pre-pandemic levels. 

{{ecl-302||The unemployment} rate} also remained steady at 3.4%, which is its lowest level in nearly 50 years. 

Australia’s labor market has heated up substantially this year as an economic boom in the wake of a post-COVID reopening drove up demand for labor. This also translated into higher wages, although growth in salaries still lagged inflation this year. 

“The record high participation rate continues to show that it is a tight labor market, especially when coupled with very low unemployment,” said Bjorn Jarvis, head of labor statistics at the ABS.

Australia is facing a shortage of skilled workers, which has seen employers increase wages to help retain talent. 

Strength in the labor market gives the more headroom to keep raising interest rates, as it moves to bring down inflation from a 30-year high. The bank hiked interest rates by 25 basis points in December, and signaled more monetary policy tightening was in order.

But higher interest rates have also adversely affected the Australian economy, which grew at a slower-than-expected pace in the third quarter. This could eventually factor into the labor market, as a post-COVID economic boom runs out of steam.

Still, strength in employment indicates strong household spending trends, which is a major driver of economic growth. The strengthened slightly after Thursday’s reading.