Australia Employers Added Workers in January After Rate Cuts
Australian employers added part-time jobs in January and fewer people hunted for work, helping keep the unemployment rate unchanged, as interest rates at a half- century low support hiring.
The number of people employed rose 10,400 from December, the statistics bureau said in Sydney today, as part-time positions advanced by 20,200. The gain compared with the median estimate for a 6,000 increase in a Bloomberg survey of 25 economists. The unemployment rate held at 5.4 percent as about 30,000 new jobs in resource-rich Queensland state offset a similar decline in the manufacturing hub of Victoria.
The data underscore the two-speed nature of the world’s 12th-largest economy, which has been driven by investment in resources to meet Chinese demand. Reserve Bank of Australia Governor Glenn Stevens lowered interest rates by 1.75 percentage points since Nov. 1, 2011, to revive industries including construction as mining investment crests.
“Employers aren’t keen to hire unless they have to, given the global uncertainties,” said Savanth Sebastian, an economist in Sydney at a unit of Commonwealth Bank of Australia. “But while jobs are being lost in some industries, clearly they are being created in other industries.”
The Australian dollar was at $1.0308 at 12:12 p.m. in Sydney, versus $1.0317 before the data were released.
Traders are pricing in a 54 percent chance the central bank will extend a rate pause next month, swaps data compiled by Bloomberg show. The RBA left the overnight cash-rate target unchanged at 3 percent this week.
The number of full-time jobs declined by 9,800 in January, today’s report showed. Australia’s participation rate, a measure of the labor force in proportion to the population, fell to 65 percent in January from 65.1 percent a month earlier, it showed.
The December jobs figure was revised to a 3,800 decline, smaller than the 5,500 decrease reported a month ago.
The unemployment rate of 5.4 percent is below the U.S.’s 7.9 percent and less than half the euro area’s 11.7 percent.
The result “potentially suggests the labor market is tighter than many commentators have been touting recently,” said Paul Bloxham, chief economist for HSBC Holdings Plc in Sydney and a former RBA official who forecast a 15,000 rise in jobs. “This steady labor market result is unlikely to trigger the RBA to cut rates again.”
Cotton On Clothing Pty, a Geelong, Victoria-based retailer, will expand its headquarters and create 500 jobs, the state government announced late last year. Victoria Premier Ted Baillieu said Nov. 16 the new jobs would increase total employment at Cotton On to about 1,300 and ensure business operations remain in the region.
Boral Ltd. announced last month it will cut about 700 jobs in Australia to save about A$90 million ($93 million) annually. About 200 of the redundancies occurred in late 2012, and most of the rest will be completed by March, the Sydney-based building materials company said Jan. 16.
“Looking ahead, with the labor market softening somewhat and unemployment edging higher, conditions are working to contain pressure on labor costs,” Stevens said this week.
In New Zealand, government data today showed employers unexpectedly cut payrolls for a third straight quarter, the longest slump since the 2009 global recession.
The Australian dollar climbed 0.3 percent to NZ$1.2327, snapping two days of declines against the so-called kiwi.
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