Australia Unemployment Stays Near 12-Year High
Australia’s jobless rate remained at the highest level in almost 12 years, a sign that many businesses are reluctant to hire in an uncertain economic climate and that interest rates may need to stay at record lows for a while yet.
Unemployment stayed at a higher-than-expected 6.2% in October, the same as the recently revised number for September. Economists had expected the unemployment rate to ease to 6.1%.
The number of people employed rose by 24,100 in October, compared with an expected 10,000 rise, the Australian Bureau of Statistics said Thursday. The number of people in full-time work climbed by 33,400, while those in part-time work fell by 9,400.
The participation rate, or the proportion of working-age people in employment or actively seeking it, rose to 64.6% in October from 64.5% the previous month. Economists had expected the participation rate to remain at 64.5%.
The higher participation rate helps explain why the jobless rate remained steady in October even as the number of people in employment rose sharply.
The central bank left interest at a record low 2.5% at a policy meeting on Tuesday, signaling that it would keep them low for some time longer. Most economists expect the next move in rates to be up, but not until well into 2015.
Rates have been at a record low for well over a year amid lackluster economic growth as a decadelong mining-investment boom fades. Firms have been slow to ramp up hiring and investment in a global and domestic environment that many still consider to be unstable.
The monthly employment report has come under increasing scrutiny since last month, when the ABS said it would revise its data after finding that routine seasonal adjustments looked out of step with actual trends.
The admission provoked a flood of criticism, including from the central bank and economists faced with determining the health of the economy. Earlier this week, the ABS made unexpected backdated revisions that lifted September’s jobless figure to 6.2% from 6.1%.
The central bank is expected to announce revisions to its own economic forecasts on Friday in a quarterly policy statement. While recent falls in the Australian dollar are likely to provide some stimulus, sharp falls in the prices of the commodities Australia exports are weighing on the economy. The country’s biggest export, iron ore, has tumbled by more than 40% this year.
Source: wsj – Australia Unemployment Stays Near 12-Year High
