The jobless rate has improved and given the Reserve Bank the chance to avoid cutting interest rates again.

The jobless rate dropped to 5.1 per cent from 5.2 per cent and the economy created 28,900 new jobs in December.

CBA senior economist Gareth Aird tells Janine Perrett the result was unexpected.

“This report has seen financial markets scale back their assessment as to whether or not the reserve bank is going to take the cash rate down.

“We think now they are going to hold interest rates when they meet in two weeks time.”

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Image: Getty/David Paul Morris