SYDNEY, Jan 18 Reuters Australian employment fell sharply in December after two months of surprisingly strong growth, while the jobless rate stayed at a 112 year high, adding to the case that interest rates have peaked as the redhot labour market cools.

Figures from the Australian Bureau of Statistics on Thursday showed net employment dived 65,100 in December from November, when it surged a revised 72,600. Market forecasts had been for an increase of around 17,600.

The jobless rate was unchanged at 3.9 from November, holding at the highest reading since May 2022. The participation rate dropped sharply to 66.8, from a record high of 67.3.

There has been limited market reaction to the jobs data, which were overshadowed by international events as traders pared back their optimism on global easing. The local dollar dipped to 0.6538 on the data before rebounding to 0.6558, while threeyear bond futures held losses at 96.17, down 7 ticks on the day.

The ABS itself noted that a change in the hiring pattern late last year led to the unexpectedly strong employment gains in October and November and a large fall in December in seasonally adjusted terms.

I think if you take a step back and look through the volatility … I think the story is pretty clear and it hasn39;t really changed that much, said SuLin Ong, chief economist at RBC Capital Markets.

Really the story is that you are getting that loosening underway. And I think to be honest, the RBA you know they39;d be pretty…