Unemployment tipped to stay steady

06.Unemployment tipped to stay steady

Jason Cadden

Sydney

(Australian Associated Press)

Employment growth is slowly improving but only doing enough to keep the unemployment rate in check.

The jobless rate in October is tipped to stay unchanged for a second month in a row 6.2 per cent, according to an AAP survey of 13 economists.

The number of Australians with a job is forecast to have risen by 15,000 in October, after a fall of 5,100 in September.

The Australian Bureau of Statistics will release its employment report on Thursday.

Commonwealth Bank senior economist John Peters said there need to be stronger jobs growth to deal with more people entering the workforce.

So far this year there are an extra 160,000 people with jobs, at an average monthly gain of just under 18,000.

“Labour supply has increased more than previously expected, with the higher participation rate more than offsetting slower population growth,” he said.

Mr Peters said the better performing jobs market had forced the Reserve Bank to revise its forecasts for the unemployment rate.

In the RBA’s Statement on Monetary Policy last week, the bank said the unemployment rate will stay in its recent range between six and 6.25 per cent, and then gradually decline, citing stronger jobs growth.

Three months earlier, the RBA said it would peak below 6.5 per cent.

The latest ANZ job advertisements survey, a key indicator of employment growth, showed that the number of jobs advertised on the internet and in newspapers rose by 0.4 per cent in October, up 12 per cent in the 12 months to October, seasonally adjusted.

ANZ chief economist Warren Hogan said the improving trend in jobs ads meant the jobs market should stay strong in the near term.

“The parts of the economy least affected by the ongoing sharp decline in resources investment and commodity price weakness have strengthened, supported by the lower Australian dollar, low interest rates and strong property market activity,” he said.

“In particular, many services industries are experiencing relatively strong demand, and these industries are typically quite labour intensive.”

Mr Hogan expects the unemployment rate will decline a little in the coming months but says jobs growth will weaken early in 2016, sparking an interest rate cut by the Reserve Bank.

UNEMPLOYMENT STAYING STEADY

* Unemployment rate at 6.2pct in October

* Employment growth is tipped to be 15,000

* Employment growth forecasts ranged from a 5,000 to 25,000

* Participation rate forecast to stay steady at 64.9pct

(Source: AAP survey of 13 economists)

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