Australian Employers Add 52,700 Workers in January

By Jacob Greber

Feb. 11 (Bloomberg) -- Australian employers added workersfor a fifth straight month in January and the jobless rate fell, a sign the nation’s economy is weathering central bank Governor Glenn Stevens’s record round of interest-rate increases. The number of people employed gained 52,700 from December, the statistics bureau said in Sydney today. The median estimate of 21 economists surveyed by Bloomberg was for an increase of 15,000.

The jobless rate fell to 5.3 percent from 5.5 percent. The longest run of hiring gains in almost two years increases pressure on Stevens to resume raising borrowing costs in 2010, after he unexpectedly kept the benchmark interest rate unchanged last week. Policy makers kept the rate at 3.75 percent, saying information about the impact of three increases from October to December is still unclear. “The labor market now looks to be in a full-fledged recovery,” Felicity Emmett, a senior economist at RBS Group Australia Ltd. in Sydney, said ahead of today’s report. “The Reserve Bank has signaled further rate hikes” this year. The number of full-time jobs gained 15,900 January and part-time employment increased 36,900, today’s report showed.

Investors are betting there is a 100 percent chance of a quarter-point increase in the overnight cash rate target to 4 percent before the end of the second quarter, according to Bloomberg calculations based on interbank futures on the Sydney Futures Exchange. Chances of a quarter-point move at the central bank’s next meeting on March 2 stand at 24 percent, the futures showed at 8:48 a.m. in Sydney.


World Leader

Stevens became the first central banker in the world to raise borrowing costs three times last year after Australia’s
economy skirted the global recession, helped by A$20 billion ($18 billion) in cash handouts to consumers from Prime Minister Kevin Rudd and another A$22 billion in spending on roads, railways and schools. The central bank says Australia’s economic growth will accelerate this year, boosted by demand from China for natural resources such as coal and iron ore that will deepen a scarcity of workers. Gross domestic product will climb 3.25 percent in the three months through December 2010 from a year earlier, after gaining an annual 2 percent in the fourth quarter of 2009, the central bank said in its quarterly monetary policy statement published last week.


Skills Shortage

“It now looks likely that the unemployment rate has peaked at around 5.75 percent, a much better outcome than thought likely early last year,” when the government forecast the jobless rate would reach 8.5 percent in 2010, the central bank said on Feb. 5. A shortage of workers may increase costs and cause delays at the nation’s liquefied natural gas projects, Fitch Ratings said on Feb. 8. Marius Kloppers, chief executive officer of BHP Billiton Ltd., the world’s biggest mining company, said yesterday that the skills shortage in Australia’s resources industry is emerging faster than expected. Chevron Corp. in December announced it signed an $82 billion deal with Japan’s Tokyo Electric Power Co. to supply liquefied natural gas from its Wheatstone field in Western Australia. The project is forecast to generate 6,500 jobs during construction.


Qantas Hiring

It is in addition to the Chevron-led Gorgon gas venture, which is forecast to create another 10,000 jobs when
construction starts this year. Prior to today’s release, government reports showed Australian employers added 135,700 jobs between September and the end of 2009. In contrast, the unemployment rate in the U.S. was 9.7 percent in January, and 10 percent in November among European Union countries, the highest rate in more than 11 years. Qantas Airways Ltd.’s low-cost Jetstar unit plans to hire 300 workers as it adds 700,000 new seats to existing routes with four extra Airbus 320 planes.

Harvey Norman Holdings Ltd., Australia’s biggest furniture and electronics retailer, was “pretty happy” with Christmas sales at its stores compared with year-earlier numbers that were boosted by government stimulus, its Chairman Gerry Harvey said in an interview last month. Australia’s participation rate, which measures the labor force as a percentage of the population aged over 15, held at 65.3 percent in January, today’s report showed.