Australia’s unemployment rate rose 0.1% to 4.4% in November, according to ABS jobs data released this morning. The loss of 15,600 mostly part-time positions was broadly in line with expectations. but the predictions for the economy are still grim — the jobless rate bottomed out at 3.9% in February and has been edging up ever since as companies batten down the hatches.
Crikey asked a group of leading economists for their take:
Shane Oliver – AMP Capital Investors: There’s no great surprise in these numbers – they’re consistent with the labour market in the early days of deterioration. The fact that the rise in unemployment has been gradual to date doesn’t really prove anything. My feeling is that we’ll now see a more rapid deterioration, given the layoffs in the financial sector and the mining sector. Leading indicators such as the ANZ job ads series released earlier this week point to the fact that we’ll probably see significant drops in employment next year. I’m predicting an eventual unemployment rate somewhere between 7 and 9% — with the Chinese economy stalled, they’ll be a significant impact on Australian imports.
Stephen Walters – JP Morgan Chief Economist: I think the latest data probably understates what’s going on in the real world. You need to look at the job losses announced in last few weeks in the mining sector. While it’s early days, unemployment tends to lag the broader economy in a downturn. But we’ve had unemployment bottom out at 3.9% in February and it’s now at 4.4% and a half a per cent rise in 8 or 9 months isn’t insignificant. The lesson from the last two recessions in that unemployment spikes very sharply. Anecdotal evidence suggests we can expect a bleak outlook for the next 12 months. We think the jobless rate will peak at 9 per cent at the end of 2010.
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Alan Oster – NAB Chief Economist: My initial response is these numbers were not as bad as we were expecting — we were predicting a drop of 20,000 jobs and we ended up losing 16,000. The participation rate dropped a bit so that helped with the overall number. At the end of the day, it wasn’t quite as bad as people thought but that we’re only starting to go through the process of job losses. We forecast the unemployment rate will increase to 6% next year and 6.75% by 2010.
Prof John Quiggin – University of Queensland: My feeling is that it could have been much worse although it’s pretty much as we expected. I think a rise in unemployment was virtually inevitable given the job cuts announced in October and November so the he result was as good as could be expected in the circumstances. We’ll be looking for more responses to the government’s stimulus package early in the New Year that could prevent a more significant rise. As always, the state of the global economy will provide direction.