different subject - Australia - Jobs figures stun for second straight month
Good for you and this says it is due to rudd's 'healthy stimulus' - Cheers to rudd!
this was written by someone else with no link, is it true?
Australia is strong resources economy that tracks the overall state of the world economy. When world markets crashed as one, the outlook looked bleak. However, from the outset, the Rudd Labor Government embarked on more or less the most aggressive fiscal stimulus of all OECD economies. Two stimulus packages, took the Federal Budget from a $20 billion surplus to a $50 billion+ deficit. (In US terms, the equivalent of a $1.725 trillion injection.)
The stimulus did not include reductions in the formal tax rates to avoid cannibalizing the revenue base in the longer term.
The government settled instead on targeted payouts, substantial "cash plash" bonuses, paid to income earners and welfare recipients at critical times. In addition there were permanent. indexed increases in pensions and other social security payments, where virtually all the money paid out would go back into the economy from those most in need.
Also , an extensive infrastructure campaign was rolled out, much at break neck speed, together with longer term projects such as National Fiber to the Home internet , with a free choice amongst competing carriers.
It worked. Unemployment, usually comparable to the US, was held to less then 6%, and is heading straight down .
At the time. the Conservative Opposition denounced the stimulus as 'reckless', 'wasteful', 'out of control deficit spending', 'mortgaging the future of our children'. With that theory out the window, the long term costs of the recession being largely avoided, they are moving onto Interest Rates.
Somewhere, John Maynard Keynes must be smiling.
By Online business reporter Michael Janda
Unemployment tumbled from 5.6 to 5.5 per cent in December because of the creation of 35,200 jobs.
The survey figures from the Australian Bureau of Statistics show that there was a seasonally adjusted increase in full-time employment of 7,300, with part-time employment increasing by 27,900.
The ABS also revised down the November jobless figures, which now show that the official unemployment rate was at 5.6 per cent, not 5.7 per cent as was initially reported.
Economists were expecting 10,000 jobs to have been created in December, with a Bloomberg survey showing the average forecast was for unemployment to rise to 5.8 per cent, and the Reuters survey predicting unemployment to remain steady at 5.7 per cent.
Even the most optimistic forecast, from RBS, was for 30,000 new jobs and a 5.6 per cent unemployment rate.
The unemployment rate unexpectedly dropped to 5.6 per cent last month, after the creation of more than 30,000 jobs, almost all of which were full-time.
That result surprised economists, and left many thinking that unemployment had already peaked at 5.8 per cent. Today's result seems to confirm that prediction.
"It's an extraordinary result. I think even the sceptic will have to concede that unemployment has probably peaked now, and far below initial forecasts," Macquarie senior economist, Brian Redican, told Reuters.
JP Morgan economist Helen Kevans agrees that unemployment has probably passed its peak.
"Another remarkable number. We're quite amazed about the strength and resilience of the Aussie labour market," she told Reuters.
February rate rise likely
The result also shocked currency traders, with the Australian dollar surging to 92.99 US cents from 92.25 immediately before the data was released.
The currency surged as investors increased their bets on the chances of another interest rate rise when the Reserve Bank holds its first meeting of 2010 in February, because of today's strong employment numbers.
Mr Redican told Reuters the RBA is under increasing pressure to lift interest rates to keep inflation in check.
"For the RBA, it means there's less spare capacity in the economy than anyone expected and that puts a lot more pressure on for a hike in February," he noted.
Helen Kevans says a February rate rise is now almost a certain bet.
"A February rate hike is now nearly fully priced in. It also suggests the RBA is going to tighten policy a little bit faster than we expected throughout 2010," she told Reuters.
"We had forecast a cash rate of 5.0 per cent by year end, but if anything, there is upside risk to that, particularly because such a tight labour market is going to add to wage pressure."
The rise in jobs did not result in Australians working more however, with the nation's aggregate monthly hours worked slipping marginally (0.1 per cent) to 1,535.6 million hours.
The seasonally adjusted unemployment rate fell in all states, with NSW and Queensland now jointly sharing the nation's highest unemployment rates at 5.9 per cent.
Western Australia now has the lowest unemployment rate among the states, at 5.1 per cent, but the ACT has an even lower rate of joblessness, with trend unemployment at 3.7 per cent.
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