Thursday, November 12, 2009

Australian Job Growth Continues

Australian employment growth continued in October, with the number of new jobs being 24,500, the equivalent of roughly 340,000 in the U.S. Together with last months gains, this means that the slight loss in jobs in earlier months has been fully recovered and that overall employment reached a new record high of 10.83 million.

Unemployment still increased slightly, but that was due to a big increase in the work force. Australia has an unusually high rate of population growth (2% per year) so employment must grow by about 18,000 per month just to accomodate the growing population, and this month the participation rate also increased.

This report increases the probability that the Reserve Bank of Australia (RBA) will again increase interest rates. The 32% appreciation of the Australian dollar relative to the U.S. dollar this year will on the other hand make the RBA more reluctant to hike interest rates.