Investing.com– Australia’s job market expanded more than expected in December, reflecting the strength of the labor market despite challenges from high interest rates and inflation.

That grew by 56,300 in December, data from the Australian Bureau of Statistics showed on Thursday. The reading was higher than expected at 14,500 people, and up from 36,500 seen last month.

This brought Australia – which measures the percentage of the population in the workforce – down to 67.1% in December, compared to expectations that it would remain steady at 67%.

The increase was 4% in December, in line with forecasts, and compared with an increase of 3.9% in the previous month.

Australia has seen its job market expand past expectations for eight of the past nine months, with a decline seen in October.

In November, a higher-than-average number of people transitioned to work without a job and waiting to start work in October. This trend continued in December with a strong increase in employment, and contributed to the rise in unemployment.

A tight labor market is one of the main concerns for the Reserve Bank of Australia to keep interest rates steady. The RBA held rates steady at nearly a decade high, citing a strong labor market and sticky underlying inflation.

The strength of the labor market is also holding back inflation amid strong consumer demand.

The RBA is scheduled to announce its next one on February 18, 2025.

Market analysts widely expect the RBA to begin a rate cutting cycle in 2025, with the first cut expected in May.