Australia Cuts Jobs as Stimulus Wanes

Australian employment fell in August by almost twice as much as economists estimated, driving down the nation’s currency on expectations the central bank won’t raise interest rates anytime soon.

The number of people employed dropped 27,100 from July, when it rose a revised 33,700, the statistics bureau said in Sydney today. The jobless rate held at 5.8 percent.

Falling employment adds to signs the economy may slow in coming months after reports yesterday showed retail sales unexpectedly fell in July and home-loan approvals ended a record nine-month run of gains as the effect of government stimulus spending wanes. Traders today pared bets on when central bank Governor Glenn Stevens will raise borrowing costs from a half- century low of 3 percent.

Full-time jobs dropped 30,800 in August as companies including BHP Billiton Ltd. cut workers amid the global recession that has eroded demand for exports of iron ore and coal. Part-time work increased 3,800.

Today’s report supports the government’s view that it is too early for it to wind back A$22 billion ($19 billion) in spending on new roads, railways, ports and schools.

The drop in employment may also erode consumer spending that helped Australia’s economy expand in the second quarter at the fastest pace in more than a year. Gross domestic product gained 0.6 percent in the second quarter from the previous three months, when it grew 0.4 percent.

Australia Cuts Jobs as Stimulus Wanes, Bloomberg
9/10/2009 12:06:30 AM