- 06 Nov 2003 07:34
#41814
November 6, 2003
AUSTRALIA'S unemployment rate fell in October to 5.6 per cent hitting the lowest point in nearly 14 years confirming the underlying strength in the economy.
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Jobless rate tumbles
November 6, 2003
AUSTRALIA'S unemployment rate fell in October to 5.6 per cent hitting the lowest point in nearly 14 years confirming the underlying strength in the economy.
Total employment rose 69,200 to 9.617 million. Of this full time employment grew by 19,900 and part time by 49,300, adjusted.
The last time the rate was 5.6 per cent was in December 1989.
The workforce participation rate in October was 63.8 per cent, compared with 63.5 per cent in September.
Economists said the data supported yesterday's decision by the Reserve Bank of Australia to raise official interest rates yesterday by 25 basis points to 5.0 per cent.
"It's following on from what we've seen in strong domestic demand, the housing sector, recovery from the drought all pointing towards the fact that conditions are far too strong for stimulative monetary policy," Westpac economist Justin Smirk said.
He noted both full time and part time employment increased in the month.
"We had expected a strong part time number because of the weakness we saw in the previous month," he said.
"It does point to underlying strength in the economy. You can't dig into it and find something that was weaker than we thought."
Westpac senior economist Huw McKay agreed.
"The Reserve Bank is looking good in hindsight but the data they got a couple of days before the decision really pushed them over the edge," he said.
"We expect another move in December."
Today's figures follow Monday's newspaper job advertisements, which rose for the sixth successive month in October – the longest stretch of growth in four years.
The ANZ bank said the number of ads in major metropolitan newspapers rose 1.4 per cent while the number of jobs advertised on the Internet surged 5.9 per cent to the highest level since April 2001.
But ABN Amro chief economist Kieran Davies said the growth in employment had been unexpected.
"We'd thought that the rebound in the economy would start to generate jobs, but we hadn't expected them to be giving it this sort of growth,"he said.
"It just cements expectations that the RBA is likely to hike (interest rates) again before Christmas, and that the unemployment rate this low suggests that the economy can stand much higher interest rates."
National Australia Bank treasury economist Kris Bernie said the data partly confirms strength in the labour intensive construction industry and more broadly confirms the Australian economy accelerated in the past six months after the end of the war in Iraq.
"That's confirming what we've seen in the National Australia Bank's business survey and other indicators."
AAP
http://www.news.com.au/common/story_page/0,4057,7786007%255E28097,00.html
AUSTRALIA'S unemployment rate fell in October to 5.6 per cent hitting the lowest point in nearly 14 years confirming the underlying strength in the economy.
HOME > DRUGS HAUL > STORY
Get News by Email Print This Article Email This Article
Jobless rate tumbles
November 6, 2003
AUSTRALIA'S unemployment rate fell in October to 5.6 per cent hitting the lowest point in nearly 14 years confirming the underlying strength in the economy.
Total employment rose 69,200 to 9.617 million. Of this full time employment grew by 19,900 and part time by 49,300, adjusted.
The last time the rate was 5.6 per cent was in December 1989.
The workforce participation rate in October was 63.8 per cent, compared with 63.5 per cent in September.
Economists said the data supported yesterday's decision by the Reserve Bank of Australia to raise official interest rates yesterday by 25 basis points to 5.0 per cent.
"It's following on from what we've seen in strong domestic demand, the housing sector, recovery from the drought all pointing towards the fact that conditions are far too strong for stimulative monetary policy," Westpac economist Justin Smirk said.
He noted both full time and part time employment increased in the month.
"We had expected a strong part time number because of the weakness we saw in the previous month," he said.
"It does point to underlying strength in the economy. You can't dig into it and find something that was weaker than we thought."
Westpac senior economist Huw McKay agreed.
"The Reserve Bank is looking good in hindsight but the data they got a couple of days before the decision really pushed them over the edge," he said.
"We expect another move in December."
Today's figures follow Monday's newspaper job advertisements, which rose for the sixth successive month in October – the longest stretch of growth in four years.
The ANZ bank said the number of ads in major metropolitan newspapers rose 1.4 per cent while the number of jobs advertised on the Internet surged 5.9 per cent to the highest level since April 2001.
But ABN Amro chief economist Kieran Davies said the growth in employment had been unexpected.
"We'd thought that the rebound in the economy would start to generate jobs, but we hadn't expected them to be giving it this sort of growth,"he said.
"It just cements expectations that the RBA is likely to hike (interest rates) again before Christmas, and that the unemployment rate this low suggests that the economy can stand much higher interest rates."
National Australia Bank treasury economist Kris Bernie said the data partly confirms strength in the labour intensive construction industry and more broadly confirms the Australian economy accelerated in the past six months after the end of the war in Iraq.
"That's confirming what we've seen in the National Australia Bank's business survey and other indicators."
AAP
http://www.news.com.au/common/story_page/0,4057,7786007%255E28097,00.html
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