November 7, 2013 – 12:02PM
On the rise: unemployment crept higher in October. Photo: Louie Douvis
The jobless rate has edged higher as the labour market softens amid a transition towards non-mining led growth.
The unemployment rate rose to 5.7 per cent in October, up from 5.6 per cent the month before, with 1100 jobs added to the economy. The jobless rate had slipped from its four-year high of 5.8 per cent in August.
Full-time positions shrank by 27,900 while part-time jobs rose by 28,900. The participation rate remained stable at 64.8 per cent, after the September figures were revised down from 64.9 per cent.
“The economy is still not creating much in the way of new jobs,” said National Australia Bank senior economist David de Garis.
“We’ve had net 4000 jobs in the past two months and what we’ve had has been all part-time. Over the past year, employment is up by 0.7 per cent year-on-year and aggregate hours are up by 2 per cent. So that tells you that [employers] are switching more to part-time.”
The aggregate monthly hours worked lifted by 6.2 million hours to 1.65 billion hours. The seasonally adjusted employment-to-population ratio slipped 0.1 percentage points to 61.1 per cent.
The Australian dollar lost a third of a cent, falling from 95.22 US cents to 94.96 US cents.
The jobs data came as the latest figures on the construction industry showed it expanded for the first time in three years last month, in early signs of a recovery in the sector.
Economists were expecting the jobless rate to rise to 5.7 per cent and for the 10,000 positions to be created in October.
The jobless rate rose in NSW, Victoria, South Australia and the ACT. It remained stable in Queensland and the NT, but fell in Western Australia and Tasmania.
The unemployment figures are seen as a key indicator for the Reserve Bank as it weighs up continuing its monetary policy easing cycle, which has seen it cut the cash rate by 225 basis points since November 2011.
RBA governor Glenn Stevens said in a statement following the central bank’s decision to keep interest rates at a record low of 2.5 per cent that he expected the unemployment rate to edge higher in the near-term as mining investment falls.
The Australian Industry Group’s monthly measure of the construction industry, released today, found the index rose 6.8 points to 54.4 in October, the highest since 2010.
The expansion was driven by the residential construction sub-sectors, with the apartment sub-sector recording the strongest growth of the month.
“Consolidation over the next few months will show whether a sustained recovery will be built on the combination of renewed confidence and low interest rates during the first half of 2014,” said AiG’s public policy director Peter Burn.
ANZ’s monthly jobs advertisements survey released on Monday recorded a slight fall in October, pointing to a possible stabilisation in the employment market in trend terms.
Retail sales rose by 0.8 per cent in September, above economists’ expectations of a 0.4 per cent lift, as sales at department stores and for clothing, footwear and personal accessories grow, official figures released on Monday showed.
More to come
The Sydney Morning Herald