Unemployment rate worst in 10 years
The jobless rate has shot up to 6 per cent, its highest level in more than a decade, as 3700 jobs were removed from the economy, official figures show.
There were 7100 full-time positions lost and 3400 part-time jobs added, the Bureau of Statistics data for January showed.
The participation rate, the percentage of people either in work or looking for work, remained stable at 64.5 per cent. December’s participation rate was revised down to 64.5 per cent from 64.6 per cent.
“There’s no spinning it, Australia’s labour market is weak,” Moody’s Analytics associate economist Katrina Ell said.
“Businesses are not confident in future economic conditions so are trimming jobs and working their existing staff harder.”
Analysts had expected the unemployment rate to edge up to 5.9 per cent, with 15,000 jobs added to the economy.
The further losses in full-time jobs for both men and women suggested broader weakness in the labour market beyond the mining and resources-related sectors, ANZ’s head of Australian economics Justin Fabo said.
The unemployment rate, which edged up last year, is expected to rise further above 6 per cent in 2014 as the economy adjusts to lower investment from mining companies.
“I guess what we’ve got to remember is jobs growth is a lagging indicator of economic activity,” St George’s chief economist Besa Deda said.
The Reserve Bank has repeatedly noted in its statements that it has been expecting the jobless rate to push higher as the mining boom peaks and the economy turns to other sectors to drive growth.
In its Statement of Monetary Policy released on Friday, it said that “with growth of economic activity expected to remain below trend for a few more quarters at least, it is likely that employment growth will be only moderate over the coming year and the unemployment rate will continue to edge higher”.
The latest labour market numbers came as a monthly survey by Westpac and the Melbourne Institute found consumer confidence slipped for the third straight month in February, as Australians fretted over the weak jobs outlook.