A huge surge in employment in Australia has surprised economists, with more than double the number of new jobs created in September than had been expected.

The latest ABS data shows there were 64,100 new jobs over the month compared to the 25,000 that forecasters had been tipping.

In further good news, one economist said the “hot labour market” did not mean the Reserve Bank would be forced to order another rate rise due to inflation.

Moody’s Analytics economist Harry Murphy Cruise said the figures inevitably sparked discussion about whether the jobs market was too tight to bring down inflation.

“There’s little evidence of that to date,” he said, pointing out that spending was down.

“Not only are measures of underlying inflation moving lower, but Commonwealth Bank’s spending indicator shows a fall in activity through September.

“Survey measures also point to households holding off big-ticket purchases.

“Without a surge in spending, the tight labour market won’t spur a revival in inflation.

“Accordingly, the September labour market data doesn’t change our view that the central bank’s first rate cut will come in February.”

The ABS figures showed Australia’s unemployment rate hung on at 4.1 per cent, in line with a downwardly revised figure for August.

The participation rate rose to a record high of 67.2 per cent, buoyed by the strong growth in employment.

“Employment has risen by 3.1 per cent in the past year, growing faster than the civilian population growth of 2.5 per cent,” said Australian Bureau of Statistics head of labour statistics Bjorn Jarvis.

“This has contributed to the increase in the employment-to-population ratio by 0.1 percentage point, and 0.4 percentage points over the past year, to a new historical high of 64.4 per cent.”

Australia’s jobs market has proved resilient in an economy hit by higher interest rates aimed at bringing down inflation.

The gradual rise in the unemployment rate from the mid-three per cent readings of 2022 suggests the labour market is loosening, but slowly.

The Moody’s Analytics economist said some weakening in the labour market was expected in coming months.

“Business finances are strained, particularly in interest rate-sensitive sectors such as retail, hospitality and recreation,” Cruise said.

“This will see a modest tempering of new job creation.

“At the same time, the number of new job seekers will stay strong, buoyed by graduates and population growth.

“With new job creation trailing the number of people looking for work, joblessness is set to hit 4.4 per cent by December and 4.5 per cent by mid-2025.”

-with AAP