Australian employers added workers for a second month in October and the unemployment rate fell as energy companies ramped up hiring, helping the economy weather global market turmoil from Europe’s fiscal crisis.
The number of people employed rose by 10,100 after a revised gain of 22,500 in September, the statistics bureau said in Sydney today. The increase was in line with the median estimate for 10,000 more jobs in a Bloomberg News survey of 24 economists. The unemployment rate fell to 5.2 percent from a revised 5.3 percent.
The report showed a divergence in the nation’s two biggest resource states, with Queensland adding 17,900 workers and Western Australia losing 8,200. The job market nationwide may benefit from Reserve Bank of Australia Governor Glenn Stevens’s decision last week to lower the nation’s benchmark interest rate to 4.5 percent from a developed-world high of 4.75 percent.
“There is a bit of stability there in the last couple of months,” said Brian Redican, senior economist in Sydney at Macquarie Group Ltd., Australia’s biggest investment bank. He sees a “reasonable chance” the RBA will lower rates again in December, “but I think it will be driven more by Europe than by domestic concerns at the moment.”
The number of full-time jobs advanced by 20,000 in October, and part-time employment fell by 9,900, today’s report showed. Australia’s participation rate, which measures the labor force as a percentage of the population over 15 years old, held at 65.6 percent in October from a month earlier, it showed.
The Australian dollar was little changed at $1.0129 as of 12:05 p.m. in Sydney from $1.0119 before the data and $1.0143 in New York yesterday.
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.
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, Santos Ltd. 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.
The Conoco LNG venture, with partner Sydney-based Origin Energy Ltd., will create 6,000 construction jobs, the companies said in July. Shipments from the first stage of that project are expected to begin in mid-2015.
The mining investment and higher borrowing costs compared with other developed nations helped spur the Australian dollar to $1.1081 on July 27, the highest level since it was freely floated in 1983. It has gyrated as Europe’s sovereign-debt crisis intensified, gaining 9 percent in October after sinking 9.8 percent a month earlier.
The Reserve Bank, which lowered interest rates last week for the first time in 31 months, on Nov. 4 cut its forecasts for economic growth and inflation for the next two years.
Central bank Assistant Governor Philip Lowe said today that in preparing the estimates, the RBA “assumed that the European authorities do enough to avert a real disaster but are not able to avoid periodic bouts of considerable market volatility and uncertainty.”
Lowe, who heads the RBA’s economics department, spoke after concern about Europe intensified overnight as Italy’s bond yields surged past the 7 percent threshold that prompted Greece, Portugal and Ireland to seek bailouts.
Australian business and consumer sentiment have improved and a government report on Nov. 3 showed retail sales advanced for a third straight month.
Today’s employment report is a “good result that shows, alongside other data this week, that the domestic economy is healthy and in no need of rate cuts,” said Adam Carr, a senior economist in Sydney at ICAP Australia Ltd., a unit of the world’s biggest interdealer broker.
Retail sales advanced 0.4 percent in September, the third straight monthly gain, led by spending on household goods and at restaurants, as consumers withstood fallout in financial markets from Europe’s debt crisis.
On Nov. 7, Domino’s Pizza Enterprises Ltd. said it will create more than 2,500 employment opportunities across Australia over the next six months as it opens as many as 40 new stores.
Australia’s employment data was probably helped by annual population growth easing to 1.4 percent in the year ended March 31. That was the slowest pace in 5 1/2 years as Prime Minister Julia Gillard’s government meets an election pledge to slow population gains in the nation of 22.8 million people.
Traders are betting Stevens will lower borrowing costs by another quarter percentage point next month and are pricing in some chance of a half a percentage point cut at the RBA’s Dec. 6 policy meeting, interbank cash-rate futures showed today.