Australia’s jobless rate unexpectedly rose in January as the impact of record-low interest rates and a weaker currency waned following strong employment growth late last year. The Australian dollar fell.
* Jobless rate rose to 6% from 5.8%; economists predicted 5.8%
* Employment fell 7,900 from December; economists forecast 13,000 gain
* Full-time jobs dropped 40,600; part-time employment gained 32,700
* Participation rate, a measure of labor force in proportion to the population, was unchanged at 65.2%, matching economists’ forecasts
Australian policy makers are trying to support growth against a backdrop of stagnant wages, falling business investment and weak commodity prices. They have enjoyed some luck with services industries including education and tourism adding jobs as they capitalize on the weaker currency.
The slump in employment follows a surge in jobs in October and November, though the magnitude of the increases in late 2015 brought renewed skepticism about the accuracy of the labor force data, which the Australian Bureau of Statistics has acknowledged in the past.
“We expect the official numbers may show weaker prints in coming months to correct for recent potential over-estimates,” Paul Bloxham, chief Australia economist at HSBC Holdings Plc., said ahead of the release. “However, we still expect the modest improvement in underlying labor market conditions to continue through 2016 as a whole.”
Full-Time Slump
The monthly drop in full-time employment was the largest since October 2013. The local dollar traded at 71.44 U.S. cents at 11:45 a.m. in Sydney, from 71.77 cents before the data was released.
Australia is grappling with the fallout from plunging prices of its key commodity exports as Chinese demand eases and newly opened mines boost supply. The central bank, which cut rates by 2.75 percentage points since late 2011, is banking on improving
consumer confidence to spur spending and encourage business investment.
Reflecting the end of the resource construction boom and lower commodity prices, Australian steel and iron ore producer Arrium Ltd. said Wednesday it had cut 300 jobs.
Bloomberg