Unemployment rate in Australia declines to 6.2 percent

The Australian Bureau of Statistics on Thursday showed a ray of hope for the Australian job environment by indicating a fall in the unemployment rate from 6.3 percent in July to 6.2 percent in August. The improvement in the job sector has come despite tensions in the resources and mining sector.

The job growth has kept up with the expectations of the economists as the total number of the employed individuals rose to 17,400 in the month of August, which is a lot better than the earlier forecast of 6,000.

Ben Jarman, a JP Morgan economist, said that if the participation rate, which is still going strong, is taken out of the equation, the employment conditions would appear to be improving and this means that there would not be any further rate cut.

“All this is consistent with GDP (gross domestic product) growth being enough to stabilise the labour market,” he said. “We think that message will be important for the Reserve Bank in the near term, because we think, if unemployment is relatively steady, then they will stay on the sidelines.”

Jarman has attributed the fall in the unemployment rate to a consistent job growth, as well as a relatively lower rate of participation from a two-year high only a few months before.

“If you look over the last few months, there's been a pretty solid average pace of jobs growth at about 25,000 a month,” AAP reported Jarman as saying. “There doesn't seem to be much upward momentum with the unemployment rate; it seems to be levelling out.”

Some experts had warned that the rate of unemployment could rise to 6.5 percent due to tougher conditions being imposed on individuals who are out of work in accessing the unemployment benefits. However, the data released on Thursday has relieved the tensions to some extent as analysts said that labour market steadying even at the worst times is a good sign for the economy.

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