economy sheds more than 30,000 full-time jobs

http://www.watoday.com.au/business/the-economy/economy-sheds-more-than-30000-fulltime-jobs-20140116-30w6a.html


The economy lost 31,600 full-time positions and gained 9000 part-time jobs in December. Photo: Theresa Ambrose
The jobless rate has remained at a four-year high of 5.8 per cent as 22,600 jobs were shed from the economy.
The economy lost 31,600 full-time positions and gained 9000 part-time jobs in December, figures released by the Bureau of Statistics today showed.
The participation rate dropped to 64.6 per cent, a seven-year low. Analysts had expected the unemployment rate to remain stable at 5.8 per cent, with 10,000 jobs added to the economy.

The Australian dollar fell almost a cent to a 3½-year low of 88.09 US cents after the data was released.
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"[The] disappointing jobs growth reflects how businesses have been slow to respond to RBA rate cuts," Moody's Analytics associate economist Katrina Ell said.
"The unemployment rate doesn't adequately capture weakness in the labour market due to outsized growth in part-time positions and falling participation. Unless the Australian dollar falls further the RBA will be forced off the sidelines."
Deutsche Bank senior economist Phil O'Donaghoe said while the economy lost jobs last month, the falls came after three months of gains.
"I don't think it changes our view of the economy," Mr O'Donaghoe said of the December data, adding that the monthly report was subject to sampling variability.
"There's conflicting forces on either side - you've got stimulatory policy with a rebound in housing and construction on the one hand, and they are positives. On the other hand, you've got a fall in mining investment, further weakness in commodity prices and the terms of trade and also pretty soft government spending.
"We do think the trend in the official employment numbers is softer than where we think the true economy is tracking. I think the economy is actually generating more jobs on average per month than is being caught in the official employment statistics at present."
The Treasury expects the unemployment rate to rise to as high as 6.25 per cent this year as the economy continues to expand at a below-trend pace, before it picks up again in 2015 as non-mining sectors pick up the gap left by a fall in resources investment.
A separate measure of the labour market from Roy Morgan Research, which was released earlier this week, found that the jobless rate rose to 11.2 per cent in December from 10.2 per cent in November. Roy Morgan said the rise in the unemployment rate was due to a large increase in the size of the workforce.


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