Unemployment figures could heighten need for interest rate cuts

Further cuts to interest rates are even more likely after new figures showed that levels of unemployment have increased across Australia.

Information provided by the Australian Bureau of Statistics (ABS) showed that the number of people who were out of work in December 2011 stood at 5.2 per cent of the population.

The amount of Australian citizens in employment was down by 29,300, leaders at the ABS stated.

Overall, nearly 11.5 million Aussies held a job during the month, but Commsec economist Savanth Sebastian said that the downturn in employment opportunities, coupled with the ongoing uncertainty in the eurozone, heightened the need for interest rate adjustments.

"The latest employment result cements our view that the Reserve Bank will likely have to cut interest rates over the next few months to stimulate activity," he remarked.

Most economists expect the Reserve Bank to slash rates when the board next meets in February, which would follow on from reductions of 0.25 per cent made in both November and December.

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