As Aussie Unemployment Grows to a Four-Year High, Newly Elected PM Set to Face Heat

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As Aussie Unemployment Grows to a Four-Year High, Newly Elected PM Set to Face Heat
As Aussie Unemployment Grows to a Four-Year High, Newly Elected PM Set to Face Heat

As Aussie Unemployment Grows to a Four-Year High, Newly Elected PM Set to Face Heat

Apart from illegal emigration, unemployment will be a major challenge for the newly elected Prime Minister Tony Abbot. The right wing Abbot government is facing huge challenge to bring unemployment rate down which has reached to a four-year high at 5.8% according to the latest data released by the Australian Bureau of Statistics (ABS) today.

According to ABS Australia’s seasonally adjusted unemployment rate increased 0.1 percentage points to 5.8 per cent in August. Another lot of unemployed people have been added to already massive unemployment as the number of people unemployed increased by 9,400 people to 714,100 in August.

Although the ABS monthly seasonally adjusted aggregate hours worked series is showing a sort of increase in August wherein it surged to 1.1 million hours to 1,650.0 million hours, the number of full-time jobs declined by 2,600 in the same month. Similar trend was seen in part-time employment which fell by 8,200.

Lower Labor Participation Rate

ABS also showed that participation rate also dropped to 65 percent in August from 65.1 percent a month earlier. According to economists, participation rate, a measure of the labor force in proportion to the population is a major indicator of employment; fell due to decreased part-time employment.

Major reason behind decrease in fulltime job is attributed to decrease in male full-time employment which has also contributed to total unemployment where it is compounded by a decrease in female part-time employment. The total unemployment reaching to four-year high is going to be a major challenge for both the central bank and the incoming Abbott government.

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State-Wise Performance

There has also been reluctance to new hiring as is being indicated by the job advertisements – it is another indicator of confidence in employment. Whereas some states have done slightly better, the overall growth has declined.

Some states have received better than the national employment rate e.g. the jobless rate rose to 5.9% from 5.7% in NSW, in Queensland it increased to 6% from 5.9%, in Western Australia it jumped to 5% from 4.6%, in Tasmania it rose to 8.3% from 8.2%.

The states that fared worse are South Australia which fell to 6.8% from 7.1%. Victoria and ACT remained unchanged as they got 5.7% and 3.7% respectively. Thus, after recording its first back-to-back jobs decline in more than two years, Australia seems a tough turf for the right wing Tony Abbott.

To contact the reporter of this story: Jonathan Millet at john@forexminute.com