Unemployment Rate Climbs

[Guest The Pom Queen]

The unemployment rate jumped back to 6 per cent in January, as the job market shrank by about 8000 and the number of people looking for work grew, according to the Australian Bureau of Statistics.

The official rate, which many economists have been questioning, compares with 5.8 per cent in December.

The RBA is unlikely to be surprised by the pullback in the jobs figures, given the previous super strength.

 

ANZ economist Justin Fabo

The result was below expectations, and the Australian dollar immediately dropped about 0.6 per cent, to as low as US71.34¢. It later recovered to be at US71.67¢ in mid-afternoon trade.

 

Economists were quick to play down the importance of the January rise in the official jobless rate, pointing to a long-term trend of employment growth.

The ABS said on Thursday that, seasonally adjusted, the number of full-time employed fell 40,600, while the number of part-time employed increased by 32,700.

 

 

The participation rate held steady at 65.2 per cent.

The ABS had warned that the profile of that part of the sample group rotated out in its January survey may have distorted the month-on-month comparison.

Economists were quick to play down the importance of the January rise in the official jobless rate, pointing to a long-term trend of employment growth.

Capital Economics' chief economist for Australia, Paul Dales, said Thursday's figures probably reflected "data moving back to reality after the unbelievable strength late last year, rather than a sign that the concerns over the global economy are giving Australian employers the jitters".

"That said, the fall in employment and rise in the labour force by 22,300 last month meant that the unemployment rate rose from 5.8 per cent to 6 per cent," he said.

Australia and New Zealand Banking group economist Justin Fabo described the data as "the correction we had to have".

"Just as the super strength in measured employment over most of 2015 overstated the improvement in labour market conditions, the falls in employment in December and January should not be interpreted as the labour market hitting a wall," he said.

However, he warned that job growth momentum appeared to be slowing, and this would force the Reserve Bank of Australia to cut interest rates further this year.

"The RBA is unlikely to be surprised by the pullback in the jobs figures, given the previous super strength and questions surrounding data quality, so more data will be needed to get a clearer picture," he said.

"The slowing trend in monthly job ads growth, however, bears close watching."

 

 

Read more: http://www.smh.com.au/business/the-economy/unemployment-climbs-back-to-6-per-cent-20160217-gmx0qp.html#ixzz40XAVrwX4

[flybyknight]

wonderful to see this balance.

i guess the aussie programs on tv in the uk still make it seem like the financial promised land.

the current downturn in the mining sector and the economy in general and the governments backing of a dead horse should be reflected.

a great post.

[newjez]

I would be interested to see what the dole figures look like.

[Guest Dave53]

If the dollar dropped yesterday with the unemployment figures , how is going to fare at the end of the year when both Holden and Ford close down their car plants and an additional 130,000 suddenly find themselves out of work ? .

 

Dave C