Shares continue to rise, workers fight for jobs: Economy roundup

The Australian sharemarket has opened higher today after positive leads from Wall Street, despite new data that shows the jobless rate has grown.

The benchmark S&P/ASX200 index was up 63.6 points or 1.7% to 3839.3 at AEST 12.25.

The Australian dollar has also dropped to US71 points following weak economic data from China.

NAB shares have gained 3% to $22.59, while Commonwealth Bank shares have jumped 2.7% to $37.77. Woolworths shares have gained 3.4% to $26.46 on news that sales have jumped 6%, while ANZ has gained 2.8% to $17.28.

Overseas, Wall Street recorded gains despite new jobless figures on the back of better-than-expected first quarter figures from Google and JP Morgan. The Dow Jones Industrial Average gained 95.81 points or 1.19% to 8125.43.

The number of Americans claiming unemployment benefits hit record highs in April, according to new figures from the US Labor Department, with continued claims rising to 6.02 million.

But the Government has also said that the total number of US workers filing for new claims dropped by 53,000 to 60,000 in the week ending 4 April. The figures brought fresh optimism that the downturn may be reaching its bottom.

“The four-week moving average for initial claims usually peaks about two months before the trough of a business cycle, which means the recession could end as early as June,” Michael Darda, chief economist at MKM Partners told Reuters.

Back in Australia, the SEEK Employment Index for March has revealed the battle for jobs is heating up, with the ratio of new job ads to job applications falling by a seasonally adjusted 9.7%.

While the number of new job applications rose a seasonally adjusted 0.4% in March, the new data shows that the number of job applications per jobseeker has remained steady.

SEEK employment managing director Joe Powell says this suggests a greater focus from job seekers who are looking for jobs in their expertise, and that job seekers are better off using a limited number of applications.

“It is very easy for job seekers to loose their nerve when competition gets tight,” says Powell. “But when competition is tight, it is important for job seekers to be even more focused and look for specific roles that make the most of their skill set to give them that competitive edge.

“You’re more likely to hit your target if you focus on it, rather than shooting indiscriminately,” he says.

Meanwhile, these pessimists at the International Monetary Fund are at it again, claiming the recession is likely to be unusually severe. The IMF last month said that the world economy will contract for the first time in 60 years. 

“The implications of these findings for the current situation are sobering,” the IMF said of the report. “The current downturn is highly synchronised and is associated with a deep financial crisis, a rare combination in the post-war period.

“Accordingly, the downturn is likely to be unusually severe, and the recovery is expected to be sluggish.”

In New Zealand, new figures from the Reserve Bank of New Zealand shows that the annual inflation rate has eased back into the bank’s target range, leading expectations for more interest rate cuts. 

The consumer price index jumped 0.3% in March, pushing inflation down to 3% from 3.4% in the previous quarter.

“All-in-all, inflation is not a major concern for monetary policy and will not stand in the way of a 50 basis point cut at the end of the month,” ANZ-National Bank senior markets economist Khoon Goh told Reuters.