Australia’s unemployment rate jumped to a more than 12-year high of 6.4 percent last month, official data showed yesterday, providing further ammunition for the central bank to cut interest rates.
Economists had been expecting a rise to 6.2 percent from December last year’s 6.1 percent, but with the number of people employed falling by 12,200, it was worse than expected, at a level not seen since August 2002.
The Australian Bureau of Statistics said full-time employment dropped 28,100 last month and part-time employment was up 15,900.
The weaker reading saw the Australian dollar plunge from US$0.7726 to near six-year lows of US$0.7656 after the figures were released.
The Reserve Bank of Australia (RBA) last week cut forecasts for this year’s economic growth and inflation, and warned that unemployment would likely rise as the economy transitions away from a mining investment boom.
The caution followed a cut in interest rates this month to a record low of 2.25 percent. They had previously been on hold for a year and a half.
ANZ senior economist Riki Polygenis said the jobless numbers were worse than feared.
“The rise in the unemployment rate to 6.4 percent suggests the surprise decrease to 6.1 percent in December was an outlier, with the unemployment rate continuing to track up in trend terms,” Polygenis said.
“While new labor demand is holding up, it is not enough at present to offset retrenchments in particular industries such as mining and manufacturing or to keep up with the flow of new workers into the economy,” he said.
The weakness left the door open to more rate cuts, he added.
“We expect a further rate cut in [the first half of] 2015, most likely at the next board meeting in March,” Polygenis said.
Quay Equities head of trading Tristan K’Nell agreed that another rate cut was on the cards.
“The numbers probably continue to give the RBA the ammunition to continue to cut interest rates next month,” K’Nell said. “Improvement in employment is the major issue for our economy to go with other issues such as low business and consumer confidence, falling economic growth, an end to the mining cycle, low inflation and our major trading partners slowing.”
Australia’s unemployment rate has been edging up over the past two years as the economy prepares for an expected sharp fall-off in mining investment this year.
The resource-driven economy is also struggling under the impact of a fall in prices for key commodity exports, including an almost halving of iron ore prices last year due to weakening demand from China.
JP Morgan economist Tom Kennedy said the unemployment data was a “shocking report all round.”
“It really does suggest that the Australian labor market is still softening and that’s a trend we think will continue over the next few months, pushing the unemployment rate towards 6.5 percent and maybe a little bit higher,” he said.
To many, Tatu City on the outskirts of Nairobi looks like a success. The first city entirely built by a private company to be operational in east Africa, with about 25,000 people living and working there, it accounts for about two-thirds of all foreign investment in Kenya. Its low-tax status has attracted more than 100 businesses including Heineken, coffee brand Dormans, and the biggest call-center and cold-chain transport firms in the region. However, to some local politicians, Tatu City has looked more like a target for extortion. A parade of governors have demanded land worth millions of dollars in exchange
An Indonesian animated movie is smashing regional box office records and could be set for wider success as it prepares to open beyond the Southeast Asian archipelago’s silver screens. Jumbo — a film based on the adventures of main character, Don, a large orphaned Indonesian boy facing bullying at school — last month became the highest-grossing Southeast Asian animated film, raking in more than US$8 million. Released at the end of March to coincide with the Eid holidays after the Islamic fasting month of Ramadan, the movie has hit 8 million ticket sales, the third-highest in Indonesian cinema history, Film
Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) revenue jumped 48 percent last month, underscoring how electronics firms scrambled to acquire essential components before global tariffs took effect. The main chipmaker for Apple Inc and Nvidia Corp reported monthly sales of NT$349.6 billion (US$11.6 billion). That compares with the average analysts’ estimate for a 38 percent rise in second-quarter revenue. US President Donald Trump’s trade war is prompting economists to retool GDP forecasts worldwide, casting doubt over the outlook for everything from iPhone demand to computing and datacenter construction. However, TSMC — a barometer for global tech spending given its central role in the
Alchip Technologies Ltd (世芯), an application-specific integrated circuit (ASIC) designer specializing in server chips, expects revenue to decline this year due to sagging demand for 5-nanometer artificial intelligence (AI) chips from a North America-based major customer, a company executive said yesterday. That would be the first contraction in revenue for Alchip as it has been enjoying strong revenue growth over the past few years, benefiting from cloud-service providers’ moves to reduce dependence on Nvidia Corp’s expensive AI chips by building their own AI accelerator by outsourcing chip design. The 5-nanometer chip was supposed to be a new growth engine as the lifecycle
RSS