The Federal Government will go into this year’s election campaign riding the strongest jobs market in seven years, with new figures showing unemployment falling and giving a boost to cash-strapped households.

The Australian Bureau of Statistics reported the jobless rate edged down to 5% in December after the creation of 21,600 jobs. Victoria’s jobless rate fell to 4.2%, its lowest level since the ABS started measuring unemployment on a monthly basis in 1978. In NSW, unemployment edged down to 4.3%, its lowest level since before the Global Financial Crisis in 2008.

WA’s unemployment rate is the highest in the nation at 6.3% while it is 6.1% in Queensland and 5.9% in both Tasmania and South Australia. A strong employment market is seen by many analysts as the key to underpinning real estate markets around the nation. The overall tight jobs market is still to translate into strong wages growth. When unemployment last averaged 5%, the wage price index was at 3.6%.