No sign of any real deterioration in the Australian employment picture in April, with the latest figures showing positive jobs growth but a slight rise in the unemployment rate to 4.2% from 4.1% in March.
In fact, the number of new jobs was more than double the market estimate: 25,000 vs a 10,000 estimate. It’s a sign the gathering slowdown has not hit employment or the ability of employers to keep hiring people. It was the 18th consecutive month that we have seen a growth in jobs in Australia.
The ABS said that the number of people employed increased by 25,400 to 10,712,900 in April while the number of people unemployed rose 16,900 to 469,800.
Since March, the unemployment rate has edged up from a 33-year low of 4% to April’s 4.2%, a small sign of the impact of the slowdown being seen in retail and building, but not enough to convince the Reserve Bank that inflationary expectations will be depressed by rising job losses.
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The rise in the unemployment rate to 4.2% came from a small rise in the male unemployment rate to 4.0% and a 0.2% rise in the female unemployment rate to 4.5%.
The participation rate rose to a near-record 65.4%, meaning there were more people confident enough to be looking for work. The Reserve Bank would prefer to see the participation rate easing as people are discouraged from looking for work by the slowing economy.
The news comes on top of poor building approvals for March and indifferent retail sales for the same month.
The April jobs figures are the first indicator we’ve had from the current quarter and although employment lags as an indicator, the RBA will want to see a rise in the number of jobless and a fall in the job creation going on in the economy. Jobs growth grew at a strong 2.9% in the year to April.
The RBA would probably like to see what is happening across the Tasman where the New Zealand’s employment fell by the most in 19 years in the first quarter. The unemployment rate rose to 3.6% from 3.4% in the December quarter, according to figures from Statistics New Zealand. When taken with other indicators showing falling home sales, slowing exports but still high levels of inflation, the Kiwi economy seems trapped in a nasty inflationary spiral that is heading downwards.
Upmarket department store chain, David Jones produced lower than expected third quarter sales figures this morning. The retailer said third-quarter sales revenue rose 3.8%, reflecting the slowing pace of consumer spending. The growth was under the 4.2% annual rise in headline inflation in the quarter.
CEO Mr Mark McInnes said, “Our 3Q08 Sales performance reflects the slowdown in consumer spending that we were anticipating and had started to plan for more than 18 months ago. Our business is in good shape and we are well prepared for the expected continuing environment of softer consumer demand.”
And in a sign that the slowdown in new home building is taking a toll, building products group Boral this morning downgraded its 2008 earnings outlook. Boral revised its guidance for net profit to the bottom end of a range from $234 million to $256 million. It earned $298 million in 2007.