Australian Employers Added More Workers Than Forecast
Australian payrolls rose more than economists forecast in March, capping the best quarter since 2010, led by financial and manufacturing states Victoria and New South Wales. The local currency reached a one-week high.
Payrolls rose by 44,000, a statistics bureau report showed in Sydney today, almost seven times the median estimate for a 6,500 increase in a Bloomberg News survey of 24 economists. The jobless rate stayed at 5.2 percent, compared with expectations for a rise to 5.3 percent.
Reserve Bank Governor Glenn Stevens signaled last week he may end a three-month pause and resume lowering rates next month if weaker-than-forecast growth slows inflation, even as a pipeline of resource projects spurs hiring by companies including BHP Billiton Ltd. (BHP) to meet Chinese demand. Traders priced in 88 basis points of rate reductions in the next year after today’s data, down from 94 percent yesterday, a Credit Suisse Group AG index showed.
“Numbers like today are a bit of a reality check” on market expectations for the scale of rate cuts this year, said Su-Lin Ong, head of Australian economic and fixed-income strategy at RBC Capital Markets in Sydney. “I don’t think it changes the much bigger picture that the labor market is soft.”
The Australian dollar strengthened, buying $1.0384 at 3:33 p.m. in Sydney from $1.0307 before the data were released. It touched $1.0386, the highest since April 3.
Traders are pricing in an 83 percent chance the RBA will reduce borrowing costs by a quarter percentage point to 4 percent at the next policy meeting, down from a 93 percent chance yesterday, a separate Credit Suisse index showed.
Stevens said last week the central bank is waiting to see an April 24 report on consumer prices before deciding whether to lower rates.
Today’s data showed a labor-market rebound last month after 15,400 job losses in February prompted increased bets on a rate cut as a currency above parity with the U.S. dollar hurts non- mining exporters.
BlueScope Steel Ltd. (BSL), the country’s largest steel producer, shuttered its export division in August. Toyota Motor Corp. (7203) and General Motors Co. (GM) have cut jobs in Australia this year, citing the currency’s strength.
In the first quarter, the number of employed people jumped by 76,700, the biggest quarterly advance since the final three months of 2010, the report showed.
The number of full-time jobs advanced by 15,800 in March, and part-time employment rose by 28,200, today’s report showed. Australia’s participation rate, a measure of the working-age population, increased to 65.4 percent in March from 65.2 percent a month earlier, it showed.
Job gains were led by New South Wales, the nation’s most populous state, with a 19,100 increase, and Victoria, the center of the nation’s struggling manufacturing industry, with an 11,500 gain. The rise in NSW was the biggest in 10 months.
Domino’s Pizza Inc. (DPZ) said last month it will buck the recent trend of job losses and plans to hire 1,000 new employees across Australia.
Chief Executive Officer Don Meij said in a March 12 statement there had been “a recent surge in demand for value pizzas.” Australian consumers have boosted savings and reduced spending in recent months as concerns mount about unemployment.
The new jobs include 350 in Queensland state, 300 in New South Wales and 150 in Victoria, the company said in the statement.
Australia’s economy is being driven by a resource bonanza as China and India, two countries that account for more than a third of the world’s population, increase demand for minerals and energy.
In mining states, Queensland added 7,800 jobs and Western Australia added 4,900, the report showed.
More than 25,000 new workers will be needed to complete mining, natural gas and transportation projects in Queensland by late-2012, according to the industry-funded group Construction Skills Queensland.
BG Group Plc (BG/), Santos Ltd. (STO) and ConocoPhillips are moving ahead with more than $50 billion of liquefied natural gas projects on the central Queensland coast. Arrow Energy Ltd., owned by Royal Dutch Shell Plc and PetroChina Co., plans a fourth LNG development on Queensland’s Curtis Island.
“We have an economy, the fundamentals of which are strong,” Prime Minister Julia Gillard told reporters in Canberra today. “That’s been reaffirmed today by our unemployment figures. We see unemployment figures where unemployment has stayed low. The Australian economy in the last month has created a third of the jobs created in the total U.S. economy.”
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