SYDNEY, Sept 14 Reuters Australia39;s employment surged in August while its participation rate hit a record high and the jobless rate held steady, in a sign that decadehigh interest rates have yet to soften demand in the drumtight labour market.

While robust jobs figures on Thursday were mostly driven by parttime positions and have not dramatically changed the monetary policy outlook, they come amid a heating debate about workers pay and productivity with unemployment near fivedecade lows.

The data from the Australian Bureau of Statistics showed net employment rose 64,900 in August from July, when they fell by an upwardly adjusted 1,400. Market forecasts had been for an increase of around 23,000.

The jobless rate held steady at 3.7, matching forecasts from analysts, while the participation rate surged to 67.0, the highest since records began in 2013.

Headline indicators report a very strong employment report, but the bias towards predominantly parttime employment should temper exuberance, said Dwyfor Evans, head of APAC macro strategy at State Street Global Markets.

There is little here to move the dial for the Reserve Bank.

The Australian dollar briefly broke above 0.6450 after data, unwound those gains and then rose again to 0.6442. Markets maintained bets that the Reserve Bank of Australia RBA would keep rates steady next month, with an about 40 chance of one final hike early next year.

The labour market has proven remarkably resilient with 410,700 net jobs…