- ANZ first big bank to cut rates
- Rate cut delays bolsters bank coffers
- Two-speed economy now a two-state economy
- State-by-state jobless trends
The economy lost 39,900 full-time positions last month more than reversing the 26,200 full-time jobs added in October, the Australian Bureau of Statistics reported today. The tally was the most full-time positions shed by employers since April.
“It’s a softer number…much weaker than the market had been looking for,” said Macquarie economist Brian Redican. “The longer this kind of softness persists the greater downside risk for consumer spending and that’s just going to put pressure on businesses.”
Australia’s economy is increasingly divided between the booming resource sector and stagnant non-mining industries. Figures out this week pointed to Australia’s growth picking up – and remaining the envy of much of the rest of the rich world – but most of the expansion is coming in Western Australia and Queensland alone.
“A lot of people were getting excited about growth numbers yesterday,” Mr Redican said, noting third-quarter GDP expanded by a better-than-expected 1 per cent. “This employment data indicates the strong economy is not translating into more jobs.”
A surge in part-time hiring, though, helped moderate the overall job loss for the economy to 6,300 positions for the month.
Economists had tipped the jobless rate to remain at 5.2 per cent last month, matching the previous month’s 5.2 per cent published figure. The analysts also predicted the economy would add a net 10,000 jobs for November.
Employment growth last month was dominated by part-time demand, with employers adding 33,600 such positions – the most in a month since October 2010.
The Australian dollar dived half a US cent on today’s jobs figures to $US1.023 before clawing back some of the losses to trade recently at $US1.025. Investors wagered today’s weak jobs figures increases the chances the Reserve Bank will extend its series of interest rate cuts to bolster growth.
Michael Blythe, chief economist at Commonwealth Bank, says the economy at an ”equilibrium spot.”
“This probably adds marginally to the case for a cut in February, or explains why the RBA cut,” Mr Blythe said. “The labour market clearly is softer. That’s certainly something that’s important in RBA calculations.”
Earlier this week, the RBA sliced interest rates another 25 basis points, its first back-to-back monthly rate cut since April 2009. So far, though, none of the big four commercial banks has adjusted their lending rates in the wake of Tuesday’s rate reduction.
Today’s drop in jobs was ”not at an alarming pace,” said Su-lin Ong, senior economist for RBC Capital Markets. ”But that tells you a lot about the underlying economy and that will keep the RBA’s easing bias firmly intact.”
RBC expects another 50 basis point cut in the RBA’s cash rate to 3.75 per cent next year, while some other economists are predicting even steeper cuts.
Financial markets are rating the prospect of a February rate cut by the RBA at about a 40 per cent chance. Investors, though, tip the RBA’s cash rate to fall to at least 3.25 per cent in a year’s time – implying four more 25 basis-point cuts.
Total employment fell to 11.457 million in the month, with full-time employment dropping to 8.026 million in November and part-time employment rising to 3.431 million.
The ABS report also showed aggregate hours worked by employed people fell by 0.7 per cent in November, seasonally adjusted, after a rise of 0.8 per cent in October. Aggregate hours worked in November 2011 were 0.8 per cent higher than in November 2010, compared with a rise 3.5 per cent between November 2009 and November 2010 – indicating a slowdown in growth.
The November participation rate – a measure of the proportion of the working age population looking for work – was 65.5 per cent, compared with a 65.6 per cent in October. The participation rate was forecast to remain at 65.6 per cent.
NSW on the improve
Today’s jobs figures, though, don’t entirely reinforce the resource-led economy view.
New South Wales, the most populous state, saw its unemployment rate decline to 5.2 per cent in November from 5.3 per cent, while in Victoria it rose to 5.5 per cent from 5.4 per cent, on a seasonally adjusted basis.
In Queensland, the jobless rate rose to 5.8 per cent in November from 5.7 per cent, while in Western Australia it was flat at 4.3 per cent over the two months.
In Tasmania it rose to 6 per cent in November from 5.1 per cent in October. In South Australia, the jobless rate was flat at 5.3 per cent over the two months
The jobs figures today mark the last major economic official data due for release this year.
ANZ job ads were flat in November from a revised 0.6 per cent fall in October. The forward-looking reading on the jobs market suggests weaker growth to come, analysts say.
More to come
email@example.com with AAP, Reuters
- 40,000 full-time jobs lost in a month (theage.com.au)
- Job market weakens as businesses cut costs (news.theage.com.au)
- Aussie jobless rate rose to 5.3% in Nov (news.theage.com.au)
- Aussie jobless rate rose to 5.3% in Nov (news.smh.com.au)
- National jobless rate rises to 5.3% (news.theage.com.au)
- National jobless rate rises to 5.3% (news.smh.com.au)
- $A falls after RBA rates decision (news.smh.com.au)
- RBA cuts cash rate to 4.25 per cent (news.theage.com.au)