Australia Jobless Rate Rises

Australia’s jobless rate climbed to the highest in a year as employers cut part-time workers in November, adding to signs the economy may follow Japan, the U.S. and Europe into a recession.

The jobless rate rose to 4.4 percent from 4.3 percent in the previous month, the statistics bureau said in Sydney today. The number of people employed fell 15,600 after gaining in October. The median estimate of 22 economists surveyed by Bloomberg News was for unemployment of 4.4 percent and jobs to decline 15,000.

Australia & New Zealand Banking Group Ltd. and Rio Tinto Group are among companies shedding employees amid a deepening global economic slowdown. Central bank Governor Glenn Stevens has slashed borrowing costs by three percentage points since September, the most aggressive round of cut since the economy was last in a recession in 1991, to restore consumer and business confidence.

The number of full-time jobs gained 8,800 in November and part-time employment decreased 24,400 from October, today’s report showed.

Rio Tinto, the world’s third-largest mining company, said yesterday it will eliminate 14,000 jobs, reduce capital spending by more than half and sell significant assets” as demand for metals sinks in the global recession.

Tenneco Inc., the world’s largest maker of automobile exhaust systems, announced on Oct. 29 the closure of an engineering center in Australia amid plans to reduce about 5.2 percent of its workforce.

Employers are also shedding Australian staff amid concern the local economy is on the brink of a recession, after gross domestic product expanded 0.1 percent last quarter from the previous three months, the weakest pace in eight years.

Qantas Airways Ltd., Ford Motor Co., Fairfax Media Ltd., and Telstra Corp. are among companies that have recently announced plans to fire workers.

The Finance Sector Union of Australia estimates that the worsening global credit crisis has seen local banks and brokerages cut 4,821 employees this year, union spokeswoman Leanne Shingles said yesterday.

ANZ Bank has shed 1,000 jobs, while Westpac Banking Corp. and its BT Investments unit fired 450 workers. The local divisions of Goldman Sachs Group Inc. has cut 10, Merrill Lynch & Co. 20, and UBS AG 50, the union said.

Financial services account for 7.8 percent of Australia’s A$1 trillion ($659 billion) economy, according to Investment and Financial Services Association estimates.

Job-vacancy advertisements slumped 8.6 percent in November, the seventh month of declines, led by a record drop in newspaper notices. Business confidence slipped to a record low last month.

Australia Jobless Rate Rises,
12/10/2008 4:55:42 PM