Jobless rate drops to 5.5%
Thursday, January 14, 2010
Australia's jobless rate fell last month as the labour market gathered strength, building the case for further interest rate rises.
The unemployment rate eased to 5.5 per cent in December from a revised 5.6 per cent rate in November, according to the Australian Bureau of Statistics.
Analysts had expected the jobless rate to rise to 5.8 per cent for the month.
The economy added 35,200 jobs last month - although all but 7300 of them were part-time positions - much more than the 10,000 extra jobs economists had tipped.
''These are extraordinary results,'' said Moody's Economy.com's Matt Robinson. ''The strength of labour market results over the last six months is amazing.''
The extra jobs underscore the surprisingly moderate economic downturn, with Australia likely to dodge a jobless rate of 6 per cent. The Federal Government was predicting the rate to rise to 8.5 per cent by the middle of this year.
''It shows the Australian economy is very robust if not strong given global circumstances," Mr Robinson said.
Such a buoyant reading on the economy overall means Australia can sustain tighter monetary policy, he said. "We can expect gradual tightening to continue."
Australia's low employment rate stands in telling contrast to the 10 per cent jobless rate seen in the US, and across much of the Eurozone, where the financial crisis crippled confidence and curtailed hiring. In the UK, unemployment is 7.9 per cent, while in Germany it is 8.1 per cent.
100,000 jobs
Australia added about 93,800 jobs in the final three months of 2009. For the year, the gain was about 100,000 - but less than the 135,000 created in 2008 when the jobless rate ended the year at 4.6 per cent.
The economy has added jobs for the past four months, its best run since April of 2008 when the global financial turmoil combined with a series of interest rate rises at home to cool the labour market.
The Australian dollar leapt on today's better-than-expected news. The currency gained almost half a US cent, trading recently at 92.9 US cents.
Investors raised their bets that the RBA will increase rates for an unprecedented fourth consecutive meeting when its board meets on February 2. The market now rates the chances of another 25 basis point rate rise by the RBA at about three-in-four, compared with 60 per cent just prior to the release of the jobless figures, according to Credit Suisse.
Such an increase would lift the interest rate to 4 per cent.
Across the board
All states reported a drop in the jobless rate, underlining the broad gains on the employment front.
New South Wales' jobless rate dropped to 5.9 per cent in December from 6 per cent in November, seasonally adjusted. In Victoria, it fell to 5.2 per cent from 5.4 per cent.
Queensland's fell to 5.9 per cent from 6.1 per cent, while South Australia's eased to 5.3 per cent from 5.5 per cent. Western Australia's rate also sank to 5.1 per cent from 5.2 per cent.
In Tasmania, the rate fell to 5.2 per cent from 5.4 per cent, while it was unchanged at 3.7 per cent in Australian Capital Territory.
Recruitment interest rising
Melbourne-based Recruitmentworks managing director Adam Rowson said he had seen more interest from clients this year compared with last, as companies look to hire more staff and overall confidence improves.
''There are quite a few jobs I'm working on at the moment and a bunch more that I know of coming up,'' he said.
''I'm just not quite getting the candidate response yet'', he said, but is still expecting a pick-up once jobseekers return from holiday.
czappone@fairfax.com.au
BusinessDay
- Chris Zappone - SMH