Jobless on the rise, but WA remains highest employed State

"WESTERN Australia's unemployment rate rose by 0.4 per cent to 4.4 per cent from June to July, but was still 1.2 per cent healthier than a year ago, Bureau of Statistics figures released today showed. "

        Despite the drop, WA still has the lowest unemployment rate of Australia’s seven States with Tasmania at the other end of the food chain where unemployment sits highest at 6.5 per cent. Of the mainland States, Queensland and New South Wales have the highest unemployment rate at 5.6 per cent. In both States, unemployment rose by 0.3 per cent from June to July.

        Victoria fared marginally better, unemployment rising by 0.1 per cent to 5.5 per cent in Australia’s most densely populated State. Overall unemployment in Australia rose by 0.2 per cent to 5.3 per cent in July. Seasonally adjusted, total employment rose by 23 500 to 11.236. Full time employment fell by 4,200 to 7.866 million from June to July, but part time employment increased by 27,700 to 3.369 million.

        CommSec chief economist Craig James said the economic slowdown had finally caught up with the job market.

        “Consumers aren’t spending, the housing market is slowing, businesses have become more cautious and the services and construction sectors are going backwards. So eventually it had to be reflected in the job market,” Mr James said.

        “Effectively the Reserve Bank lifted rates too far, too fast, robbing the economy of momentum at a time when the US and Europe continued to meander along.

        “Businesses have become more cautious, cutting work hours and taking on part-time staff in preference to full-time workers. We would expect this mid cycle slowdown to persist until late in 2010,” Mr James said.

        CommSec forecasts that unemployment will hold hover between 5 and 5.5 per cent in the next few months, ending the year close to 5 per cent and easing to 4.5-4.75 per cent in mid 2011.

        Mr James said it was important not to over-react to one month’s set of figures.

        “The economy may have hit an air pocket, but it will be back on the normal flight path once consumers and business have had a few months of stability with interest rate levels. However, it does mean that the last remaining rationale for a rate hike in 2010 has been taken away. The risks are now skewed to the Reserve Bank remaining on the internet rate sidelines until 2011.”

        CommSec said that “secretly the Reserve Bank would not be disappointed that the jobless rate had troughed for the time being”.

        But the slowdown was further bad news for retailers as consumers, already not spending, would now have even deeper pockets and shorter arms.

        The ABS report also revealed that the aggregate hours worked by employed people in Australia fell 0.5 per cent in July, seasonally adjusted, following a fall of 0.1 per cent in June. Prior to that, falls of 0.5 per cent in March and 0.9 per cent in April were followed by a jump of 2.6 per cent in May, the biggest one-month increase since 1988.

        Aggregate hours worked in July were 2.8 per cent higher than in July 2009, a turnaround from the previous 12 months which recorded a fall of 2.9 per cent in aggregate hours worked.

More Details: http://www.perthnow.com.au/business/news/jobless-on-the-rise-but-wa-remains-highest-employed-state/story-e6frg2qu-1225904386794