After a bright start to the morning, the local market’s early gains fell away following the shock news that the unemployment rate fell in November.
The ASX 200 ended 0.24% or 19 points lower at 8,334.6 points with the Utilities sector the worst off, followed by Industrials and Property. Tech stocks, however, ended the session higher.
Unemployment falls
The ABS jobs data showed the unemployment rate fell to below 4% for the first time since March, an unlikely development for those hoping for a near-term RBA rate cut.
In seasonally adjusted terms, the unemployment rate fell to 3.9% last month as more than 35,000 people found jobs during the month. This was down from the 4.1% rate reported for October.
The Reserve Bank had been forecasting the unemployment rate to creep up to 4.3% by the end of this year, and for wages growth to keep slowing as labour market conditions continue to ease.
Commenting on the figures, Westpac economics team’s Ryan Wells said, "We caution that these results rely on some curious developments around labour supply and gross flows within the labour market," he warns.
"We saw something similar in late 2023 that proved to be a 'head fake', with shifting seasonality also presenting as an issue. There is a risk of an unwind in December."
Wells noted that a fall in the participation rate, or the proportion of Australians in or looking for work, accounted for almost all of the decline in unemployment, which would have held flat at 4.1% if the participation rate had not declined.
Westpac views the labour market as remaining solid but argues that slowing wages growth may still not be a barrier to RBA interest rate cuts.
Industrial action hits building industry
The ABS has revealed that the building and construction industry has been hit hardest by industrial action.
Of the total working days lost in the September quarter, 59% occurred in the building and construction industry, with 27,500 working days lost – a startling 300% increase from the June quarter.
The numbers held true on a per 1,000-employee basis as well, tripling from the June quarter’s 7.9 days lost to 25.6.
The Australian building industry hasn’t seen this level of industrial action since September 2012, when the CFMEU pushed for strikes to improve safety standards.
The Federal Government’s attempts to regulate the CFMEU are likely one of the core reasons for the increase in industrial action, as CFMEU members protest its forced administration.
The Master Builders Association (MBA) is calling on the Federal Government to establish a Construction Industry Compliance & Corruption Agency (CICCA), a central body to oversee, investigate and enforce compliance with a range of special industry-specific rules, laws and obligations.
Small cap gains
Evion Group NL (ASX:EVG, OTC:EVIGF) provided a positive update on widespread support for the Maniry Graphite Project in Madagascar prompting a 28.58% increase in the share price to $0.027 while Great Boulder Resources Ltd (ASX:GBR) was up to 13.34% higher to $0.051 on news of the discovery of high-grade gold at the Mulga Bill North prospect of the Side Well Project.
Other positive moves in the small cap sector were made by Dynamic Metals Ltd (ASX:DYM), which followed yesterday's strong move by climbing 8.89% higher today to $0.245, Constellation Resources Ltd (ASX:CR1) reached $0.195, an increase of 8.33% on the previous close, Orthocell Ltd (ASX:OCC, OTC:ORHHF) and Tamboran Resources Corp were both 8% higher, the former to $1.08 and the latter to $0.135, and Latin Resources Ltd (ASX:LRS, OTC:LRSRF) was up by 6.45% to $0.165.
Five at Five
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Riversgold makes antimony, gold, copper and silver discovery at Saint John in Canada
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Orthocell passes commercialisation milestone with first Remplir™ sales in Singapore
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Great Boulder Resources discovers high-grade gold at Mulga Bill North; set to inform robust Side Well resource update
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St George Mining inks downstream niobium and rare earths partnerships in Brazil
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On your six
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One to watch
GTI Energy boosts Lo Herma uranium resource 50% to 8.57 million pounds
GTI Energy Ltd (ASX:GTR, OTC:GTRIF) has updated the uranium mineral resource estimate (MRE) at its Lo Herma Project in Wyoming’s Powder River Basin, lifting the MRE by 50% to 8.57 million pounds