Brakes on job growth as economy idles
The unemployment rate remained steady at 5.7 per cent in October, with 1100 jobs added to the economy, data released by the Bureau of Statistics on Thursday showed.
Full-time positions declined by 27,900, the biggest fall since June 2012, while part-time jobs rose by 28,900. The participation rate remained stable at 64.8 per cent, but is at its lowest level in seven years, driven in part by an ageing population, analysts said.
The Australian dollar lost a third of a cent, falling from US95.22¢ to US94.96¢. It was buying US94.97¢ late on Tuesday.
"The economy is still not creating much in the way of new jobs," said National Australia Bank senior economist David de Garis.
"We've had net 4000 jobs in the past two months and what we've had has been all part-time."
Despite the softness in the October report, most economists said the RBA was likely to keep the cash rate on hold at a record low of 2.5 per cent, as the labour market was seen as a lagging indicator and the central bank had already factored in further near-term weakness.
Financial markets pared back their expectations of a rate hike by the middle of the year. Even so, markets were pricing in a less than 20 per cent chance of another easing move over the next few months.
"The RBA is unlikely to lower the cash rate further given rates are already very low, housing market activity is picking up strongly, and lags mean that cuts in the cash rate this year are still feeding through the economy," ANZ head of Australian economics Justin Fabo said.
RBA governor Glenn Stevens said in a statement on Tuesday following the central bank's decision to sit on the sidelines for another month that he expected the unemployment rate to edge higher in the near term as mining investment fell.
The aggregate monthly hours worked in October lifted by 6.2 million hours to 1.65 billion hours, which analysts said could eventually translate into an increase in hiring. At the same time, the seasonally adjusted employment-to-population ratio slipped to 61.1 per cent, the lowest since May 2005.
The jobless rate rose in NSW and Victoria to 5.9 per cent. It lifted to 6.6 per cent in South Australia and to 4.4 per cent in the ACT.
The unemployment rate remained stable in Queensland at 5.9 per cent and the Northern Territory at 5.3 per cent. But it eased to 4.3 per cent in Western Australia and to 7.9 per cent in Tasmania.
The jobless data came as the October figures on the construction industry showed it expanded for the first time in three years.
Frequently Asked Questions about this Article…
The Australian economy has seen a decline in full-time jobs due to ongoing softness in the labor market. In October, full-time positions decreased by 27,900, marking the largest drop in 16 months.
The Australian economy has seen a decline in full-time jobs due to ongoing softness in the labor market. In October, full-time positions fell by 27,900, marking the largest drop in 16 months.
As of October, the unemployment rate in Australia remained steady at 5.7%, with a slight addition of 1,100 jobs to the economy.
As of October, the unemployment rate in Australia remained steady at 5.7%, with a slight addition of 1,100 jobs to the economy.
The Australian dollar experienced a slight decline, losing a third of a cent and falling from US95.22¢ to US94.96¢.
The Australian dollar experienced a slight decline, losing a third of a cent and falling from US95.22¢ to US94.96¢.
Most economists believe that the Reserve Bank of Australia is unlikely to cut interest rates in the near term, as the cash rate is already at a record low of 2.5% and the labor market is considered a lagging indicator.
Despite the softness in the labor market, most economists believe the Reserve Bank of Australia is unlikely to cut interest rates further in the near term, as the cash rate is already at a record low of 2.5%.
In contrast to the decline in full-time jobs, part-time jobs in Australia increased by 28,900 in October, indicating a shift towards more part-time employment.
The outlook for job growth remains cautious, with the economy not creating many new jobs. However, an increase in aggregate monthly hours worked could eventually lead to more hiring.
The participation rate in Australia remained stable at 64.8%, but it is at its lowest level in seven years, partly due to an aging population.
The participation rate has remained stable at 64.8%, but it is at its lowest level in seven years, partly due to an aging population.
Unemployment rates vary across regions, with increases in New South Wales and Victoria to 5.9%, South Australia to 6.6%, and the ACT to 4.4%. Meanwhile, rates remained stable in Queensland and the Northern Territory, and decreased in Western Australia and Tasmania.
Unemployment rates vary by region, with NSW and Victoria at 5.9%, South Australia at 6.6%, the ACT at 4.4%, Queensland at 5.9%, the Northern Territory at 5.3%, Western Australia at 4.3%, and Tasmania at 7.9%.
The increase in aggregate monthly hours worked by 6.2 million hours to 1.65 billion hours in October could potentially lead to an increase in hiring, according to analysts.
Yes, the construction industry in Australia expanded for the first time in three years, which is a positive sign for the economy.
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