Australian Employment Surges

Australian employers unexpectedly added workers in October, pushing the nation’s currency to its highest level this year on speculation the central bank will raise interest rates for a record third straight month.

The number of people employed rose 24,500 from September, the statistics bureau said in Sydney today. The jobless rate rose to 5.8 percent from 5.7 percent.

Australia’s economy is expanding with less spare capacity than earlier thought likely,” the central bank said last week, as China’s demand for resources spurs companies such as Chevron Corp. to hire workers. Reserve Bank Governor Glenn Stevens will raise the benchmark interest rate by a quarter percentage point on Dec. 1 to 3.75 percent, economists surveyed by Bloomberg say.

Australia’s economy is growing faster and generating more jobs than the government and central bank forecast earlier this year, helped by Stevens’s decision to slash borrowing costs by a record 4.25 percentage points between September 2008 and April to a half-century low of 3 percent.

Growth was also boosted in the first half of this year by more than A$20 billion ($19 billion) in cash handouts to households from Prime Minister Kevin Rudd’s government. Another A$22 billion is being spent on roads, ports and schools.

Signs of a rebound in Australian employment were among reasons Stevens raised the overnight cash rate target by a quarter point in October and this month to 3.5 percent, and signaled further gradual” increases.

Western Australia’s unemployment rate fell 0.7 percentage point to 5 percent in October, the lowest level in five months. In Queensland, another major mining state, the jobless rate declined to 6 percent from 6.3 percent. By contrast, Australia’s most populous state, New South Wales, home to Sydney, jumped to 6.1 percent from 5.5 percent.

The participation rate, which measures the labor force as a percentage of the population aged over 15, held at 65.2 percent in October, today’s report showed.

Australian Employment Surges, Bloomberg
11/12/2009 8:33:43 AM