More out of work despite jobs bounce
A surprise jump in the number of full-time jobs has increased expectations the labour market is stabilising, even as the unemployment rate rises back to a four-year high.
The November jobless rate rose to 5.8 per cent, a level it last reached in August, as the economy added 15,500 full-time and 5500 part-time positions, official figures released on Thursday showed. The participation rate remained stable at a seven-year low of 64.8 per cent.
"Overall we would describe [the data] as solid, with the continuation of some conflicting signals in the data pointing to stabilisation in the labour market, rather than any outright strength or weakness," Deutsche Bank economists Adam Boyton and Phil O'Donaghoe said.
The jobless rate remained steady in NSW at a seasonally adjusted 5.9 per cent, at 4.3 per cent in Western Australia and at 7.8 per cent in Tasmania. It rose to 6.2 per cent in Victoria and to 6.8 per cent in South Australia, but fell to 5.6 per cent in Queensland.
The previous lift in employment in NSW appeared to have stalled, with the state losing 35,400 jobs over the past six months after adding 57,900 positions in the previous six months, the economists said.
Analysts welcomed the lift in full-time positions after several months of declines, but said the bounce was not unexpected and the trends in the labour market remained soft.
"The economy had lost 16,000 jobs over the prior six months, and that's with population growing 150,000. So we thought there's a possibility for some kind of bounce," JPMorgan economist Ben Jarman said.
The employment-to-population ratio remained steady at a seasonally adjusted 61.1 per cent, its lowest level since January 2006. "In that context, [the] bounce is pretty modest, because we're still clearly behind what's the normal run rate and the details on the labour utilisation side are also fairly weak," Mr Jarman said.
A separate December-quarter survey of business expectations in the manufacturing sector from the Australian Chamber of Commerce and Industry and Westpac, published on Thursday, showed strong lift in demand and production indicators, while the employment outlook firmed.
"Against the very subdued backdrop provided by the September-quarter national accounts, the December-quarter ACCI-Westpac report is a welcome reprieve," Westpac economist Elliot Clarke said.
"At present, firms look to have put a halt to job shedding, but are seeking to maximise the productivity of their current staff."
The report came a day after car manufacturing was dealt another blow when General Motors said it would cease producing Holden cars in Australia in 2017. About 2900 positions are expected to be lost.
Treasury expects the jobless rate to rise to as much as 6.25 per cent next year as the economy continues to grow at a below-trend pace during the transition away from resources-driven growth.
At the same time, recent falls in the participation rate, partly driven by a greater number of older people exiting the work force, could help contain any projected rises in unemployment, analysts said.