Unemployment rises to 5.8%: Economy Roundup

The unemployment rate has moved 0.1% higher during October on a seasonally adjusted basis to 5.8%, according to the Australian Bureau of Statistics.

The number of unemployed people increased by 11,100 to 670,100, the highest level since January 2002, according to the ABS.

However, total employment grew 24,500 with most of the rise in part-time jobs with only 2,900 full-time positions created during October.

There was also an increase in the number of persons looking for full-time work, which jumped by 3,500 to 501,100. The number of people looking for part-time work increased by 7,600 to 169,000. The participation rate remained steady at 65.2%.

But the results have been interpreted as a positive development, with ICAP economist Adam Carr telling The Age that the result shows unemployment may have got as high as it’s going to get.

”We can pretty much say with a greater degree of confidence that we’re at the peak of the unemployment rate… or extremely close to it,” he said. ”We’ll probably see the RBA and Government revise down their peak yet again early next year towards the low 6% level, if that.”

Economist Michael Turner from 4Cast also said the Reserve Bank of Australia will take the result into account when meeting next month. “Two consecutive months of job gains are very difficult to ignore and now represents one less hurdle the RBA has to worry about before what we see as a likely rise in December.”

Additionally, consumer expectations regarding inflation have fallen according to the latest figures from the Melbourne Institute Survey of Consumer Inflationary Expectations.

The survey fell from 3.5% during October to 3.2%, following a quarter of expectations remaining flat at 3.5%.

Meanwhile, the Australian sharemarket has opened higher today after Wall Street recorded gains overnight due to comments from Federal Reserve officials indicating interest rates are likely to remain low.

Shares up after Wall Street lead

The benchmark S&P/ASX200 index was up 34 points or 0.71% to 4791 at 12:00 AEST, while the Australian dollar also remained steady at US92c after reaching a high of US93c overnight.

Commonwealth Bank shares gained 0.4% to $55.23, while ANZ also gained 0.2% to $23. Westpac lost 0.3% to $26.19 as NAB rose 1.1% to $30.59.

Shopping centre giant Westfield Group has recorded a 1.9% increase in third quarter sales in Australia, but says stabilisation is continuing in the US, Britain and New Zealand markets.

“There has been a continuation of solid performance in the Australian portfolio while stabilising conditions continue in the United States, the United Kingdom and New Zealand,” managing director Steven Lowy said in a statement.

“Given the position conditions in Australia, we are currently reviewing the timing of a number of high quality projects with the view to recommencing development activity some time in the second half of next year.”

A number of property veterans have joined the board of real estate firm LJ Hooker, with executive chairman Leslie Janusz Hooker announcing the appointments yesterday.

New additions include former Mirvac Group managing director Greg Paramor and RAMS Home Loans founder John Kinghorn.

Centro Retail Trust is now expecting underlying profit to drop by 20% during the current financial year, with net cashflow also expected to fall by 15%.

The company said today that several economic factors including fluctuation in the Australian dollar and higher interest rates have made an impact on its September quarter results.

However, it said its expectations for the results over the next year are assuming the Australian dollar will remain at US90c.

In the US, Wall Street stocks rose after comments from Federal Reserve officials indicated interest rates are likely to remain low for some time. The Dow Jones Industrial Average gained 22.6 points or 0.22% to 10,269.57.