Friday, February 1, 2013

Large Jump in Australian Employment Figures

While the rest of the world struggles to come to terms with the ongoing global recession, it seems things are very different in Australia. The Australian Bureau of Statistics today confirmed that February saw an additional 71,500 jobs created in the Australian economy against estimates from experts of just 9,000. Of the 71,500 increase it seems that 17,800 were full-time positions with 53,700 part-time positions. So what does this mean for the Australian economy?

Australian economy remains strong

Over the last few years, there is no doubt that the natural resources industry has kept the Australian economy afloat although the ongoing improvement in economic performance is more widespread today. Time and time again experts have been trying to talk down the Australian economy only for it to bounce back and surprise on the upside. It does seem as though the rate of growth will fall during 2013 but when you compare this to the ongoing problems within Europe and North America it is not a real surprise.

Unemployment in Australia remains at 5.4% which is near a historical low and perfectly illustrates the strength of the economy. Indeed the Australian government has time and time again come under pressure from various unions and working associations in relation to importing skilled workers. However, you have to say that with 71,500 additional jobs created in February 2013 the vast majority of these jobs will be associated with the domestic Australian workforce.

Monetary policy

Due to the strength of the Australian economy going forward the Australian central bank has been left with a number of options to consider at the first sign of softening economic growth. There are no alarm bells ringing with regards to a slowdown in economic growth but there is no doubt that the monetary policy of the central bank of Australia has been tweaked on various occasions to give the economy a helping hand.

When you also take into account the fact that Australian base rates are currently 3%, compared to less than 1% in the UK, there is certainly more scope for fiscal support if the economy was to slow further. There are more options open to the Australian government than the US government and the UK government put together. This is something which investors have noticed and last month's employment data gives something of a rubberstamp to the government's ongoing employment policy.

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