Australian jobless rate holds at 5.8%, ‘Aussie’ sinks

January 17, 20148:56 am254 views
Australian jobless rate holds at 5.8%, ‘Aussie’ sinks
Australian jobless rate holds at 5.8percent, ‘Aussie’ sinks

SYDNEY- Australia’s unemployment rate held steady at 5.8 per cent in December but the economy shed 22,600 jobs, data showed Thursday, sending the Australian dollar tumbling to a three-year low.

While the headline rate remained the same the Australian Bureau of Statistics (ABS) said seasonally adjusted unemployment increased, with the loss of 31,600 full-time jobs and the creation of just 9,000 part-time positions.

The rate was in line with forecasts but the “Aussie” dollar sank to 88.05 US cents – its lowest since August 2010 – from 89.03 cents on Wednesday.

The loss of 22,600 positions in December was “much weaker than market expectations for a 10,000 gain”, said AMP Capital chief economist Shane Oliver.

“Quite clearly the jobs market is very soft,” he added, with the net 54,600 jobs created in 2013 well short of the annual average growth of 170,000 in the previous five years.

However, he said the data was unlikely to see the Reserve Bank of Australia cut rates next month from their record low 2.50 per cent, with no move expected “for an extended period”.

“Employment is a lagging indicator, with the weakness that we are now seeing reflecting the soft economic conditions and bleak outlook seen around the middle of last year,” he said.

“With more forward-looking economic indicators showing signs of improvement – (for example) housing approvals, retail sales and consumer and business confidence – jobs growth should start to improve by around mid-year.”

The government expects unemployment to peak at 6.0 per cent in the year to June 30, but has forecast the jobless rate to hit 6.25 per cent in each of the next three years as Australia’s mining investment boom unwinds, weighing on the commodities-driven economy.



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