Australia’s jobless rate continues to fall
By Elizabeth Fry in Sydney
Published: December 10 2009 03:07 | Last updated: December 10 2009 03:07
Australia’s unemployment rate unexpectedly fell to 5.7 per cent in November increasing the likelihood that the Reserve Bank of Australia, the central bank, will continue raising the cash rate throughout next year as the economy gains momentum.
The Australian Bureau of Statistics said on Thursday that 31,200 jobs were added last month, amowing the combined 68,000 jobs created in September and October.
This better-than-expected number helped push the unemployment rate down from 5.8 per cent in October.
The rise in employment was driven by a 30,800 increase in full-time jobs to 7.627 million while part-time jobs increased by just 800.
This is in contrast to earlier reports this year, which indicated that Australian employers were prepared to reduce working hours rather than cut jobs. In line with the rise in full-time employment in November, employee hours were up 0.9 per cent.
The statistics bureau said its seasonally adjusted workforce participation rate fell to 65.2 per cent in November from 65.3 per cent in October
Thursday’s announcement surprised the financial markets, which expected the November unemployment rate to peak at 5.9 per cent with total employment rising by 5,000. The Australian dollar surged about half a US cent to 91.63 US cents
The Australian labour market has been remarkably resilient in the face of the sharp downturn in global economic growth.
According to Helen Kevans, a JPMorgan economist, the unemployment rate is now up just 1.8 percentage points from the trough of 3.9 per cent touched in February 2008.
She said Australia’s stellar performance was in stark contrast to the 5.1 percentage point rise in the US unemployment rate since the start of last year and the 2.6 percentage point rise in the UK unemployment rate over the same period.
The Australian economy performed well in 2009, supported by aggressive monetary and fiscal policies, continued mining investment and strong demand from China for resources.
“Owing to the swelling investment pipeline, including the fresh wave of natural resource projects now getting under way, employment growth should accelerate in 2010,” said Ms Kevans.
She said the most significant gains in employment were likely to be recorded in the resource-dependent states, such as Western Australia and Queensland. In WA, for example, the recent approval of the A$43bn Gorgon project, along with the other A$116bn of approved investment projects, will create tens of thousands of direct and indirect jobs.
Ms Kevans forecast that the labour market would tighten, highlighting the risk of labour shortages and wage pressures towards the end of next year.
Australia’s central bank has raised official interest rates three times in the past three months.
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