Australia's employment boom continued in December with 34,700 new jobs added over the month, the 15th consecutive month of expansion, and the fastest pace of growth in over a decade.
The job market set a blistering pace in 2017 with just over 400,000 positions added, many of them full-time positions.
Strong business conditions are behind the hiring spree, as the engines of investment get a boost from government infrastructure construction.
Still, the unemployment rate rose to 5.5% in December from 5.4% in November, as new job creation failed to keep pace with new entrants to the job market.
The Reserve Bank of Australia is likely to see the blip higher in unemployment as confirmation the supply of workers to the job market remains plentiful, ensuring wages growth remain near record lows.
The RBA estimates unemployment of 5% is needed to spark a jump in wages.
It's a recipe for interest rates to be held steady until well into 2018, or even next year, economists said.
The Australian dollar fell on the report, reflecting the lack of pressure on wages, inflation and interest rates in the jobs report.
Daniel Blake, chief economist at Morgan Stanley, said the RBA's focus remains on unemployment and the jobless rate needs to fall "materially" before interest rates can been nudged higher.
The RBA will remain optimistic, but not hawkish, he said.
More broadly, recent wages data hasn't been encouraging with growth in industry-wide pay agreements, or enterprise bargaining agreements, slowing.
The RBA said late last year there are only very limited indications of wage pressure in the economy, with RBA Gov. Philip Lowe telling markets there isn't case for a change in policy settings.
Fourth-quarter inflation data next week will be closely scrutinized by markets, but the first batch of meaningful wages data won't be published until the second half of February.
Interest rates have been held at record lows since mid-2016, and markets are betting the freeze will continue.
"Despite the stellar performance of the labor market in 2017, we don't think wage growth will rise much this year," said Paul Dales, chief economist at Capital Economics.
"To us, that means interest rate hikes are a story for 2019 rather than for 2018," he added.
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(END) Dow Jones Newswires
January 18, 2018 00:17 ET (05:17 GMT)