Australian Employment Surged

Australian employment unexpectedly surged in October by the most in six months, a sign lower interest rates, government handouts and exports may help the economy sidestep a global recession.

The number of people employed gained 34,300, driven by a jump in part-time jobs, after dropping a revised 3,300 in September, the statistics bureau said in Sydney today. The jobless rate held at 4.3 percent as more people looked for work.

Shipments of natural resources such as coal and iron ore, which helped boost the nation's trade surplus in September, may underpin economic growth even as the U.S., the U.K. and Japan are threatened by recessions. Reserve Bank Governor Glenn Stevens has cut borrowing costs by 2 percentage points since early September in the most aggressive round of rate reductions since the economy was last in a recession in 1991.

The government is trying to stoke consumer spending by giving pensioners, home buyers and families A$10.4 billion ($7 billion) in handouts. The payments are in addition to the biggest income-tax cuts in history, which took effect in July and will add A$5.1 billion to consumer spending in the 12 months through June 2009.

In another boost, Stevens and his board cut the benchmark interest rate by three quarters of a percentage point this week to a 3 1/2-year low of 5.25 percent, adding to a 1 percentage point reduction in October and a quarter-point adjustment in September.

The number of full-time jobs declined 9,200 in October, the second straight monthly drop. Part-time employment increased 43,500 from September, today's report showed.

Jobs vacancies advertised in newspapers and on the Internet plunged 5.9 percent in October, the biggest drop since February 2001, according to an Australia & New Zealand Banking Group Ltd. report this week.

The government yesterday predicted the unemployment rate will rise to 5 percent by the June quarter of 2009 and 5.75 percent the following year as fallout from the global financial crisis buffets the economy.

The participation rate, which measures the labor force as a percentage of the population aged over 15, rose to 65.3 percent from 65.1 percent, today's figures showed.

The unemployment report was compiled by the statistics bureau using a sample of businesses that was reduced by 24 percent in July. The bureau, which reduced the survey because of budget cuts, has said that will increase the volatility of the figures.

Australian Employment Surged,
11/6/2008 5:14:31 AM