The number of Australians unemployed has surprisingly fallen, despite a wave of job cuts by large Australian companies.
According to the Australian Bureau of Statistics (ABS), unemployment fell from 5.4% to 5.2% in November, surprising many, with economists mostly predicting a rise to 5.5%.
The participation rate, or percentage of the population employed, was steady at 65.1%, although full time employment fell by 4,200, while part-time employment was up 18,100.
We saw today construction company Boral Limited (ASX: BLD) announce that it was closing its Victorian-based clinker manufacturing facility at Waurn Ponds, which could result in the loss of 90 jobs. In the past six months, we've seen mining heavyweights, Rio Tinto Limited (ASX: RIO), BHP Billiton (ASX: BHP) and Fortescue Metals Group (ASX: FMG) laying off thousands of staff. And they aren't alone – apart from other sectors, banks and media companies are cutting significant staff numbers as well.
Some analysts have suggested the ABS numbers don't reflect reality – with one analyst giving the example that a person working just 1 hour a week is classified as 'employed' by the ABS. That person would likely say they weren't 'properly employed'.
The stronger than expected numbers suggest the Reserve Bank of Australia (RBA) is more likely to keep rates on hold in the coming months. A big jump in unemployment numbers would have put more pressure on the central bank to cut official interest rates again – following the recent 0.25% cut earlier this week.
The Foolish bottom line
Despite massive job cuts in recent times, it seems they have yet to hit our unemployment figures, but it looks like the RBA has one less reason to cut official cash rates early next year.
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Motley Fool writer/analyst Mike King owns shares in BHP. The Motley Fool's purpose is to help the world invest, better. Take Stock is The Motley Fool's free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. Click here now to request your free subscription, whilst it's still available. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
