Australia Braces for 11-Year High Unemployment Rate of 6.1%; Could Trigger Interest Rate Cut by RBA

By @ibtimesau on

Did Australian voters made a mistake when they elected the Coalition to power in September 2013? Aussies who found themselves jobless the past six months since Tony Abbott became prime minister are probably asking that question as the jobs market became tighter.

Anecdotes of jobseekers being turned down would likely be confirmed on Thursday when the Australian Bureau of Statistics releases the official unemployment rate tipped to hit an 11-year high of 6.1 per cent.

In the first two months of 2014, the country's jobless rate stood at 6 per cent despite the employment of 47,300 Australians in February. However, in March, the numbers would likely show jobs fell by 5,000.

The figure, though, is in line with the forecast by Reserve Bank of Australia (RBA) Governor Glenn Stevens that joblessness would peak at a little above 6 per cent and then ease.

However, Spiros Papadopoulous, senior economist of National Australia Bank (NAB), believes the fall in total employment would reach 10,000 which would translate into an even projected joblessness rate of 6.2 per cent.

The release of the unemployment data was preceded on Tuesday by the publication of NAB's monthly survey that business confidence went down to four in March from seven in February. The report pointed out that optimism was at its ebb since the post-federal election bounce in the later part of 2013.

"Rather than confidence rising to confirm the improvement in confidence, it seems that confidence is beginning to succumb to the continuing softness in conditions," according to NAB economists, quoted by The Guardian.

The economist said that the March unemployment rate figures could spur the RBA to cut again the overnight cash rate even if the Australian central bank had reduced the key lending rate eight times since November 2011.

NAB head of Australian economics and commodities Rob Brooker said the bank is anticipating one last cut from the RBA.

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