Australian jobless rate 5.2% in December, as HSBC tips another good year despite global woes

Australia’s jobless rate came in at 5.2% in December, with a rise in full-time employment offsetting a decrease in part-time work, as a new report tips another good year for the country, despite global economic woes.

Official figures released this morning show that the number of people employed fell by 29,300 last month to 11.42 million. Analysts had expected 10,000 jobs to be created in December.

Part-time employment was down 53,700 to 3.37 million, but full-time employment was up 24,500 to 8.05 million.

The labour force participation rate fell by 0.3 percentage points to 65.2, the Australian Bureau of Statistics says.

Speaking after the data was released, ANZ Banking Group noted ABS comments that the decrease in seasonally adjusted part-time employment was driven by weaker than usual growth during the December period, which was particularly noticeable for women aged 15 to 24.

“Although today’s data are not disaggregated by industry, women in this age group are typically employed in retail and hospitality, so this detail points to extraordinarily weak seasonal employment by retailers this year,” ANZ said.

“This supports other evidence indicating a particularly poor Christmas trading season for local non-food retailers this year, that is spread fairly evenly across the states (on a per capita basis).”

The bank also noted that full-time employment growth was concentrated in Queensland and Western Australia, with smaller pockets in New South Wales – suggesting the growth “may have been related to resources and/or engineering construction, both of which are mainly composed of full-time employment.”

Westpac, furthermore, labelled the numbers a “surprisingly weak” read on jobs.

“We had thought that a wet summer, poor domestic tourism demand and weak retail sales leading up to the Christmas sales would have hit the normal high demand for part-time employment in December but we were surprised by the size of the fall. December is a tricky month to seasonally adjust and the statistical noise this month appears to be greater than usual,” it said.

“Westpac is not looking for the labour market to pick up from here and in fact, we think it should soften, particularly in NSW and Victoria, with the national unemployment rate forecast to peak at 5¾% by mid 2012.”

The unemployment results come at a fragile time for the world economy, with the head of the eurozone, Jean-Claude Juncker, saying the group is on the brink of a technical recession, and the World Bank slashing its growth forecasts overnight.

Cutting its world growth forecasts to 2.5% for 2012, from 3.6%, the World Bank said the world economy has entered a “very difficult phase, characterised by significant downside risks and fragility” and that “no region and no country will escape the consequences of a serious downturn”.

It blames the debt problems in Europe and inflation-fighting policies for developing countries such as India for the downgrade, with commodity prices tipped to fall by 9% this year.

“The global economy is at a very difficult juncture,” the bank says.

“The risk of a much broader freezing up of capital markets and a global crisis similar in magnitude to the Lehman crisis remains. The world could be thrown into a recession as large, or even larger, than that of 2009.”

Speaking this morning, Acting Treasurer Bill Shorten said Australia was not in the same same boat as European or other developed nations, noting low unemployment numbers and Government debt.

“There’s no doubt that we’re better placed,” he told ABC Radio.

And banking giant HSBC says Australia is on track for its 21st consecutive year of economic growth, praising the stewardship of the nation’s economy, and expressing optimism about the broader outlook for Asia this year and the likelihood of a soft landing in China.

In a report entitled Australia in 2012, HSBC nominates the global economic performance, the mining boom, the Australian dollar, continued household deleveraging, the re-emergence of inflation in the second half, and fiscal and monetary policies as the key macro themes this year.

It tips falling interest rates this year, providing a fillip for construction and retail, and putting downward pressure on the local currency, which is tipped to fall to 95 US cents by the year’s end.

“This year we also expect that some of the initial impact of the high Australian dollar on the economy, in terms of weakening some sectors at the expense of others, will begin to wear off,” HSBC says.

“This is because the persistence of the high level of the Australian dollar will mean that businesses have been making adjustments to their business models. Of course, not all business models can do this and some will have ceased to work.”