Australia unemployment rate stable at six per cent

SYDNEY: Australia’s unemployment rate was steady at its decade-high level of six per cent for the second straight month in February, despite a surprising rise in full-time positions, data showed.

The Australian Bureau of Statistics said while there was strong growth in full-time jobs – an unexpected development given the unwinding of the mining boom – this was offset by a fall in the number of part-time positions.

“Full-time employment increased 80,500 to 8,049,900 and part-time employment decreased 33,300 to 3,480,900,” the bureau said.

The statistics follow announcements of thousands of job losses in Australia’s automobile and aviation sectors, many of which have yet to filter through, including 5,000 positions in national carrier Qantas to be axed by 2017.

The Australian dollar rose on the data, climbing to 90.70 US cents from 89.53 US cents late Wednesday. Unemployment in Australia is now at its highest point since the global financial crisis, when it peaked at 5.8 per cent, and its worst level since July 2003.

Conservative Prime Minister Tony Abbott said that while he was “deeply dissatisfied” with the latest figures, they were better than the previous Labor government’s predictions and confirmed to him the need press ahead with plans to cut taxes and regulation.

“I certainly take this as an important spur to further economic reform,” he told reporters.

“Plainly unemployment at six per cent is much higher than we would like it.” Australia’s economy expanded a better-than-expected 0.8 per cent in the last three months of 2013 as the commoditypowered nation’s transition away from its reliance on the mining sector picked up speed.

And, last month, Australia’s central bank lifted its economic growth forecast to 2.75 per cent in the year to June 30 as the local currency weakened and lower interest rates stimulated spending. But the Reserve Bank of Australia (RBA) warned at the time that any improvement in the labour market was only likely to be “moderate over the coming year and the unemployment rate will continue to edge higher”.

“So while this report is certainly upbeat, the unemployment rate at six per cent and annual employment growth at a tepid 0.6 per cent year-on-year (y-o-y) remain within the bounds of current RBA thinking,” said Annette Beacher, TD Securities head of Asia-Pacific research.

“With gross domestic product (GDP) expected to reach at least three per cent growth this year, we expect employment growth to follow.

However, even a return to 1.5 per cent y-o-y employment growth by year end doesn’t guarantee an unemployment rate below six per cent.” RBC Capital Markets currency strategist Michael Turner said the trend in employment “looks to have improved noticeably over the past six months”.

“It’s still uncertain how things will play out in the mining sector in the second half of the year but generally we think there will be slightly firmer outcomes for employment in the second half of the year,” he said. — AFP