Unemployment rate hits 4-year high in August

By a staff reporter, with AAP

The unemployment rate in Australia rose to a four-year high in August in line with expectations, according to data from the Australian Bureau of Statistics.

The data shows the total number of jobs in Australia fell by 10,800 to a seasonally adjusted 11.64 million in the month, compared to a downwardly revised 11.65 million in July.

Notably, the decline in the number of jobs sharply missed economists' expectations which had centred on the creation of 10,000 jobs.

As a result the unemployment rate rose to 5.8 per cent, compared with 5.7 per cent in July.

The median forecast from an AAP survey of 11 economists was for the unemployment rate to rise to 5.8 per cent in the month.

Full-time employment fell 2,600 to 8.13 million in August and part-time employment was down 8,200 to 3.51 million.

The August participation rate was 65.0 per cent, down from 65.1 per cent in July.

The participation rate is the proportion of the population that have a job, are looking for work or ready to start work.

Aggregate monthly hours worked increased 1.1 million hours to 1.65 billion hours.

Rate could deteriorate further: analysts

JP Morgan economist Tom Kennedy said the disappointing result was a sign of things to come.

He said JP Morgan expected the jobless rate to climb over six per cent by mid-2014.

"If you look at economic growth, we're currently running below trend and as a consequence of that, there's more slack in the economy and employment opportunities are drying up," Mr Kennedy said.

"A big part of that is that we are seeing the investment phase of the resources boom starting to peak."

He said the level of capital expenditure is likely to decline and growth should be a little lower as a result.

"That's all feeding through to a pretty weak economic backdrop that's going to force our jobless rate slightly higher," Mr Kennedy said.

Invast Securities chief market analyst Peter Esho said the fall in total employment was not a huge surprise even though a rise was predicted.

"The jobs market might be somewhat distorted by a long election campaign period so some will be cautious to see how this is backed up," he said.

"The RBA has been working hard at cushioning the economic slowdown and jobs have been front and centre to that thought process with inflation taking a back seat."

Mr Esho added he thinks the central bank's current cycle of cutting the cash rate may be coming to an end.

NAB senior economist David de Garis said two consecutive months of falling employment is a sign the labour market is soft.

"It is something of a reality check after the better consumer and business confidence readings over the past couple of days," he said.

"It would be wrong to infer that it was just hesitation ahead of the election.

"We have seen this trend emerge for a few months now, it's not inconsistent with the slowdown in the economy and the slowdown in the resource investment for the past year or so."

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The lower the interest rate the higher will be unepmloyment Reason simple - lower rate pushes property prices higher as speculators play there. That in turn press all workers to ask higher salaries That push companies to outsource jobs or simply move whole company overseas Result - less jobs To fix it solution it simple. Kick off property speculators, and let property prices to drop at least 30%. But as we know members of families of federal and local gvmnts are those same property speculators !!! So chance top do it properly is ZERO !!!
Alexei an argument can be made for almost anything, it would be just as right to say the opposite could apply. The trouble with house prices is that the goverment has their hand in there and they want them to be higher, just think of the loss in stamp duty + indirect taxes the goverment would miss out on if house prices were to fall. And negative gearing... keeps it all going because people are under the illusion that they are making money out of property when in truth if you subtract the capital gains tax + maintanence cost there is much of a profit again its the goverment that wins. Yeap thats that lovely goverment that always says they are trying to make property "more affordable" by giving you money (first home vendors grant) so that you can pay more.
What? How dare it rise! Koukoulas and Gottliebsen have been assuring us that the “animal spirits” driven by a small-business-friendly government was certain to usher in a new era of growth and prosperity. I swear I could heare the coins jingling in their pockets. But time and again we see this obsession with market approaches that pretend to accept that a job is very much more than simply a commodity, but then denies the logical conclusion that providing a job that satisfactorily fills an important social purpose is much more important than a job that is economically profitable. Yet the jobs that are valued are those that return economic profit, even if it is selling alcohol, cigarettes, or housing finance when housing is already unaffordable. Participation rates for teenagers are steadily falling, with no significant change in educational participation. Foreign workers (not just s457 visa workers and fee-paying students earning a bit extra) are now often out-competing against young Australians for first-time jobs - such as stacking supermarket shelves, retail sales or cleaning - in the big cities. Capitalism under the Laberals is expanding an underclass “of the excluded” not seen since the late 19th century - prime-aged men without full-time jobs, wives, or children. Both technology and deregulation have eliminated the youth-entry level jobs that once existed. As some 40% of workers are now casual, we have a “crisis of insecure work”. Jobs are an issue yes – but so is job security.
Can we blame Tony for this yet?
"Unemployment rate hits 4-year high" and "Aust stocks hit five-year high". A curious correlation supported by some economists ("Stock Market Bubbles and Unemployment"; Jianjun Miao, Pengfei Wang, and Lifang Xu; May 2013)
It is quite simple really. Unemployment data relates to how the economy performed in the past. Stock market is an indicator of hope for the future.
Unemployment rate was 8.1% in Nov 1996 when Keating lost the election to Howard. By Nov 2007, when Howard lost the election, the unempoyment rate had dropped to 4.4%. In Aug 2013, after 6 years of Labor/Green govt, the unemployment rate rose to 5.8%. Moral: Labor cannot be trusted to manage the economy.
I think the moral of the story might be that things go in cycles and we are still in the lower part of the world and therefore Australian economic cycle. It doesn't have much to do with who is in power. Under Fraser, the unemployment rate rose from 6% to over 10% in just over a year, but economic conditions were against him. Trend data is the series to use rather than seasonally adjusted. SA jumps up and down, but I guess it makes a story for the media each month. Trend employment fell 1500, but is up about 120,000 over the year. The trend unemployment rate is up, but it went from 5.73% in July to 5.76% in August. I'm not sure it will go over 6%. Could be wrong. For the 17 months of data since the election of the LNP government in Queensland in March 2012, employment has risen by 17,500 people. In comparison, the Australian figure is 171,000. Queensland has a fifth of the nation's population but has only seen a tenth of the job growth.
These stats preceded the election but regardless economies are slow to turn and one months stats are unreliable at any time.There are very mixed signs in the economy and the impact of a slowdown in mining related construction is still to be fully felt.