Australia’s jobs market has delivered a surprise boost to start the year, with the unemployment rate falling to 4.1% in December, according to new figures from the Australian Bureau of Statistics (ABS).

The economy added 65,000 jobs over the month, comfortably beating expectations.

Most of the gains came from full-time roles, which rose by 55,000, while part-time employment increased by 10,000.

The ABS said younger Australians were a big driver of the improvement, with more 15 to 24-year-olds moving into work and pushing the jobless rate lower.

Hours worked also climbed 0.4%. In a sign of how tight the labour market remains, total monthly hours worked passed two billion for the first time on record.

For retailers, the numbers are likely to be welcome news.

More people in work, and more hours being worked, usually means more money flowing through the economy.

This could translate into stronger consumer spending over the months ahead, particularly in categories like electronics and household goods where demand has been patchy.

But the strength of the labour market also complicates the outlook for interest rates.

The Reserve Bank of Australia (RBA) has been watching employment data closely as it weighs how sticky inflation might prove to be.

A jobs market that refuses to cool suggests the economy is still running close to capacity, which can keep upward pressure on wages and prices.

Some economists are now warning that the latest figures increase the risk of another rate hike, or at least push out the timing of any potential cuts.

With the RBA’s next meeting just around the corner, the stronger-than-expected jobs data will be hard for the bank to ignore.