Jobless fall could delay rate cut

    The Australian
    June 13, 2013

 

AN unexpected fall in the unemployment rate could see the Reserve Bank hold off cutting interest rates in July.

But this doesn't mean the jobless figure won't increase in coming months, economists say.   

The jobless rate fell 0.1 per cent to 5.5 per cent in May, official figures show.

Full-time employment fell 5,300 to 8.154 million while part-time employment was up 6,400 to 3.51 million.

The forecast was for total employment to fall 10,000 in May with the unemployment rate to be 5.6 per cent, an AAP survey of 13 market economists found.

Commonwealth Bank of Australia chief economist Michael Blythe said the figures showed the labour market was holding up well despite a softening in consumer sentiment and business confidence.

"Given where the leading indicators are, given the economy's running below trend, these are all signals which say the unemployment rate should move higher, but it looks like it will be a fairly slow creep up," he said.


The figures should also keep the Reserve Bank on the sidelines in July.

"The market was looking to these numbers as a smoking gun for a July rate move. This makes it look a lot less likely," Mr Blythe said.

"It's almost a month by month proposition."

reality is the numbers are more than 10%...  I hardly think 1 hour a week work is adequate employment for anyone, you'd still need newstart to top it up.

Grendel wrote on Jun 13^th, 2013 at 12:29pm:



I think the real figure is closer to 25%.

What is the real measure of unemployment? The real measure should but doesn't include hours underemployed:

Economists are warning an increase of casual and part-time work means Australia's unemployment rate is higher than we think.

The unemployment rate is currently 5.5 per cent, but official figures show another 7 per cent of workers in casual or part-time roles are willing and able to work more hours.

It is estimated that 35 per cent of Australia's workforce is now employed on a casual or contract basis.

AMP Capital economist Shane Oliver says that figure is too high.

"To have this situation where you are locked into part-time work for a long period can be debilitating," he said

Unions have recently aired a television commercial outlining their concerns.

Australian Council of Trade Unions president Ged Kearney says the trend is costing workers' entitlements.

"You lose sick leave and you lose annual leave," Ms Kearney said. "You lose carers leave - you also lose things like superannuation and it becomes difficult to get a loan."

Philippa Barr is among those looking for more work.

She has been searching for a full-time job since the start of the year, but all she can find are three casual positions.

Ms Barr says the financial impact is high.

"It's meant that I'm in a very precarious situation at the moment," Ms Barr said.

"I'm not even renting a house, I'm house-sitting because I can't afford to commit to paying rent from week to week."

Employment uncertainty is a growing issue. During the global financial crisis many employers replaced full-time jobs with part-time roles, and they are yet to change them back.

Meanwhile, more older workers are also returning to the workforce part-time because their superannuation savings have taken a hit.

Employers say casual and part-time contracts have advantages

But employer groups say workplace flexibility is needed to achieve economic growth.

They suggest there are also growing numbers of Australians who are choosing casual and part-time jobs.

There are even job websites dedicated entirely to them.

Recruitment specialist Don Robertson recently launched jobflex.com.au to tap into the demand.

"What we've found is Generation Y job seekers are more inclined, are more interested to test a market if you will, in terms of potentially looking at different employment ideas before settling on one career," Mr Robertson.

But Mr Oliver believes the casualisation of Australia's workforce is hurting the broader economy.

"If we fully utilise the resources available to us in the labour market, then we could be having a higher level of economic activity and better living standards flowing from that."

how do they come to the conclusion that 1 miilion jobs have been "created" since labor came to office??

woof woof wrote on Jun 13^th, 2013 at 2:41pm:


Correct Woof Woof

Employers are Screaming for Staff,
but the Unemployment system keeps people Unemployed in this country.

We run a unemployment industry,
so others out there can continue to have Jobs in the Unemployment industry.

Centrelink, Job networks, social Phycologists etc

People tell the unemployed what to do rather than getting them a JOB.

Sorry We don't think your capable of doing that proffession, so we suggest this....

Bobby. wrote on Jun 13^th, 2013 at 12:44pm:




Oh! how they lie.........must think we're troppo to believe those figures.

I think around the 20-25% mark, with youth unemployment as high as 40% -50%.