The jobless rate climbed in December to 4.5 percent from 4.4 percent as full-time employment plunged by 43,900, the statistics bureau said in Sydney today. The total number of people employed dropped 1,200, less than the 20,000 decline forecast in a Bloomberg survey of economists, as retailers hired more part-time workers for the Christmas rush.
Concern that rising unemployment will erode domestic growth may prompt central bank Governor Glenn Stevens to extend the biggest round of interest-rate cuts in almost two decades to boost business and consumer confidence. Rio Tinto Group and Australia & New Zealand Banking Group Ltd. are among companies firing workers amid mounting evidence Australia will follow the U.S., Europe, the U.K. and Japan into a recession.
The number of part-time jobs increased 42,800 from November, today’s report showed. The Australian Retailers’ Association said this week that shoppers spent A$37 billion ($24 billion) last month after the government started distributing A$8.9 billion in handouts to pensioners and families and encouraged them to spend the cash to support the flagging economy.
Rio Tinto, the world’s third-largest mining company, said last month it will eliminate 14,000 jobs globally, reduce capital spending by more than half and sell significant assets” as demand for metals wanes.
Export prices for coal and iron ore from Australia, the world’s biggest shipper of the raw material, will drop significantly this year, the Reserve Bank said in a report published today.
China’s appetite for natural resources such as iron ore and copper helped stoke a jobs boom that pushed the unemployment rate to 3.9 percent in February last year, the lowest in more than three decades.
Advertisements for job vacancies slumped for an eighth month in December to levels indicating the economy will enter a recession in the next nine months, according to an ANZ Bank report published on Jan. 12.
The participation rate, which measures the labor force as a percentage of the population aged over 15, fell to 65 percent in December from 65.1 percent, today’s report showed.