News

Full-time jobs sliding as rates remain on hold

08 November 2013

Expectations of a near-term reduction in interest rates remain low despite full-time job losses in the labour market being at their highest level in 16 months. 

The Australian Bureau of Statistics released figures on Thursday revealing the unemployment rate remaining steady at 5.7 per cent.

The economy welcomed 1100 new jobs but lost 27,900 full-time positions. In contrast, part-time jobs rose by 28,900 since June. 

The RBA in response is likely to keep the cash rate on hold at 2.5 per cent seeing as the labour market is seen as a lagging indicator of economic activity. 

ANZ head of Australian economics Justin Fabo confirmed this expectation to The Age. 

"The RBA is unlikey to lower the cash rate further given rates are already very low, housing market activity is picking up strongly, and lags mean that cuts in the cash rate this year are still feeding through the economy," he said.

RBA governor stated publicly that he expects the unemployment rate to swell a little further as inverstment in mining conitunues to fall from its boom levels. 

The Australian dollar has also slid after rebounding strongly from its slump last month, losing a third of a cent to US94.96.

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