Jobless rate increases
THE jobless rate has edged up to 4.4 per cent and a 12-month high, but the economy showed it was still weathering the global downturn.
Employers hired 8800 full-time workers in November, despite a barrage of gloomy reports on the global economy and fears of sharp slowdown in Australia.
ICAP senior economist Adam Carr said the job figures were “a pretty good result,” and made an emergency interest rate cut in January unlikely.
“Overall I think this will be a jobs slowdown characterised by an absence of job creation rather than massive job losses,” said Mr Carr.
Still, 24,400 part-time jobs were lost last month and recent employment surveys suggest a slump in jobs next year. Rio Tinto announced last night it will cut 14,000 jobs worldwide, although it is yet to say how many of those jobs are in Australia.
The Australian Bureau of Statistics report showed the unemployment rate rose to a seasonally adjusted 4.4 per cent last month from 4.3 per cent in the previous month, in line with the market expectations.
The increase in unemployment came as consumer expectations for inflation slumped to a five-year low.
Only 48.6 per cent of respondents in the Melbourne Institute’s December survey of consumer inflationary expectations expected prices to rise.
It is the first time most people surveyed have not expected prices to rise since the MI survey started asking people in 1995 about rising prices.
In November, 61.7 per cent of people expected prices to rise while in July, 81.7 per cent of consumers surveyed forecast rising living costs.
UBS economist Scott Haslem said the latest employment report supported his view that the jobless rate would rise steadily over the next 12 months to 5.8 per cent, with the loss of about 200,000 jobs.
“A rise in the unemployment rate of 0.1 per cent per month on average is in line with our short and sharp slowdown into the first half of 2009, and modest improvement in activity from the second half of 2009 - after zero growth in the first half,” he said.
“Today’s jobs result - which shows the expected, but not sharp, weakening in the labour market - is more consistent with a February 2009 Reserve Bank of Australia cut of 25 or 50 basis points, but not 75 or 100 basis points.”
Financial markets today fully priced in 100-basis-point by the Reserve Bank at its next board meeting in February. That would take official rates down to 3.25 per cent.
The employment report today showed that the total number of employed fell 15,600 to 10.75 million, slightly worse than market projections.
The participation rate decreased by 0.2 percentage points to 65.1 per cent as 7900 people joined the jobless queue. The number of people looking for full-time work increased by 5900, while those seeking part-time employment increased by 2000.
