Weak jobs trend confirmed by data
- 17 January, 2013 16:05
The latest round of official figures confirms the labour market is underperforming - not generating enough jobs to stop the unemployment rate from edging higher.
The unemployment rate rose to 5.4 per cent in December, from an upwardly-revised 5.3 per cent in November, the Australian Bureau of Statistics said on Thursday.
The rise, the result of an estimated fall of 5,500 in the number employed, was no fluke.
Against the background of gloomy readings from indicators like the ANZ's job ads survey and the ABS survey of job vacancies, and an unmistakable slowdown in the economy's growth rate over the middle of 2012, it was well anticipated by economists.
After a distinct flattening in the trend in employment growth from around mid-2012, the jobless rate rose to a peak which the revised figures now show to have been 5.5 per cent in September.
The average for the final four months of 2012 was 5.4 per cent.
With current trends in population growth and labour force participation, the "break-even" employment growth rate, enough to stop the unemployment rate from creeping higher, is probably about 13,000 a month.
But the bureau's estimates show the trend in employment growth is only about half that, at 7,000 a month.
So the labour market is just not doing it, and there's no reason to expect that it will suddenly start doing it in the coming few months.
The board of the Reserve Bank of Australia (RBA) is due to hold its first monthly monetary policy meeting of the year on February 5, after the traditional January break.
At that meeting, the central bank will have to decide whether the delayed impact of earlier interest rate cuts will give the economy enough of a boost to offset the effects of a severe tightening of budgetary policy at the state and federal level, the persistently high exchange rate and the looming - perhaps already arrived - peak in resource investment.
The jobs figures will add to the case for further rate cuts, because they suggest the cuts so far - beginning in November 2011 - have gained little traction.
But the RBA will still want to look at the December quarter inflation figures next Wednesday, and may wish to look at other key data before committing itself to a cash rate at a new 50-year low.
Those figures would most likely include the next ABS quarterly survey of business capital spending plans, due on February 23, and possibly even the December quarter economic growth figures on March 6, the day after the March 5 RBA board meeting.
Join the CIO Australia group on LinkedIn. The group is open to CIOs, IT Directors, COOs, CTOs and senior IT managers.
Yahoo Mail still down for some users, after an attempted fix
Queensland government to provide 200 services online by 2015
CIOs need to get their house in order, CFO panel says
Is Data Complexity Blinding Your IT Decision-Making?
Why IT projects really fail
Virtualisation and Cloud Computing: Optimised Power, Cooling and Management Maximises Benefits
IT virtualisation, the engine behind cloud computing, can have significant consequences on the data centre physical infrastructure. The particular effects of virtualisation are discussed and possible solutions or methods for dealing with them are offered. Download to learn more.
‘A Little Extra Service’ Raises Customer Satisfaction and Lowers Costs
Companies are responding to the digital generation’s preference for online support, with new channels like Live Chat and Email Management. These mobile-friendly solutions give customers the right answers at the right time, when self-service just isn’t enough, and phone calls are undesirable. Read about these new touch points and the importance of a personalized web self-service.
Virtual Server Backup Software Buyer’s Guide
Virtualization affords organizations multiple opportunities to reduce power, optimize hardware utilization, improve application availability and ultimately drive down costs. In light of its benefits, it is no surprise that virtualization penetration has surpassed 50% of all server workloads and continues to grow. In this guide, we evaluate prominent virtual server backup software solutions and identify their strengths and weaknesses.