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Australia shows strong jobs growth
SYDNEY, Australia -- Australia's employment growth has again beaten expectations, with new data out Thursday showing the jobless rate in January fell to 6.1 percent. That was just above October's two-year low of 6.0 percent. Analysts had been predicting the rate would be unchanged at 6.2 percent. The news caused a brief flurry in financial markets Thursday, with the Australian dollar going above 59 U.S. cents. But economists were quick to point out that new sampling methods partly explained a huge 111,000 rise in jobs, Reuters news agency reported. Nomura Australia economist Tom Kenny said recent movements in employment were "more indicative of noise than signal" because of the sampling change. Kenny said forward indicators of labor demand such as job vacancies pointed to a moderation in the pace of employment growth in the months ahead. Treasurer Peter Costello said despite January's statistical "blip," unemployment could improve further over the year. Economists had expected some winding back of the strong 112,600 jobs gain of the previous two months with a modest 10,000 fall in January. Instead the seasonally adjusted 111,000 rise was the largest increase since 1991. Economy coolingThe labor market has been reaping the benefit of the economy's strong performance last year, but recent forward indicators of employment and business surveys have suggested some slowing in jobs growth as the economy cools. (Full story) However, the Australian Bureau of Statistics said it was phasing in a new sample for the labor-force survey between November 2002 and June 2003. The new sample reflects the latest available profile of the population. For January it said the new sample showed considerably higher levels of males employed full-time and females employed part-time than the part of the sample it replaced. The fall in unemployment came even as more people participated in the labor market by making themselves available for work. The data showed that 64.7 percent of working-age Austalians were working or seeking jobs in January, up from the December peak of 64.2 percent. "We now have trend employment growth of 40,000 jobs per month. Its hard to believe the participation rate can keep holding as high as it is," said Anthony Thompson, senior economist at HSBC. "This has got to dampen talk of rate cuts. Certainly it will reinforce the (central bank's) balanced position," Thompson said. The Australian dollar rose above 59 U.S. cents on the data, while March bank bill futures eased, although still priced in a discount to the 4.75 percent cash rate. Share market downThe stockmarket touched a three-year low Thursday, with the S&P/ASX200 down 1.2 percent to 2849.8 in afternoon trade. The Australian economy outran the world economy last year, as strong consumer demand, a booming housing market and growing business confidence pushed it along at a rate of about 4 percent. But the impact of the long-running drought over much of Australia, exacerbated by deadly bushfires in cities such as Canberra and Sydney, have put a dampener on growth recently. It slipped to 3.7 percent in the year to the September 2002 quarter, and official GDP forecasts for the year to June 2003 are down to 3.0 percent. Other data this week has seen the two-year housing boom start to unwind, retail spending easing and business confidence fall. Reuters contributed to this report.
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