Unemployment Set To Soar
The Age
Tuesday January 13, 2009
NEWSPAPER job advertisements have collapsed, prompting renewed forecasts of recession in the year ahead and a jump in the unemployment rate to an 11-year high.
The ANZ Bank says the nationwide newspaper job advertisement total slipped to 5780 a week in December - the lowest on record and less than half the 12,000 jobs advertised a year earlier.The number of jobs advertised in Victorian newspapers dived below 2000 a week for the first time since the 1991 recession.At 1130 jobs a week, the December count was the lowest since the bank began counting Victorian job ads in the mid-1970s."It suggests that the jobs market could be in worse shape than economists expect," TD Securities economist Joshua Williamson said."Even accounting for some substitution towards internet ads over the past five years, the result is staggeringly low."The news sent the Australian dollar plunging below 70 US cents for the first time in weeks, touching a low of 68.95 US cents before closing at 69.40 US cents."Job advertisements don't normally move markets, but this count points to weaker national income than previously forecast and even more aggressive interest rate cuts. It's bearish," Mr Williamson said.Hardest hit were the previously booming states of Queensland and Western Australia, where job ads slumped by 60 and 57 per cent respectively over the year. In Victoria they slid a record 53 per cent and in NSW 52 per cent.Australia's total count of job advertisements, including those on the internet, slid a record 30per cent."Australia has no experience of recession since we started collecting internet job ads, so all our longer-term historical comparisons are based on the newspaper series," said ANZ head of economics Warren Hogan."A 50 per cent decline in newspaper job advertising in a year is historically consistent with economic recession within the next nine months and a rise in the unemployment rate over the following years," Mr Hogan said.Economists who took part in The Age's economic survey this month forecast a jump in the unemployment rate from 4.4 to 6.4 per cent this year, with economic growth barely positive.Their predictions imply an increase in the number of unemployed Australians from around 500,000 to 750,000 this year."The ANZ is expecting the unemployment rate to rise to 6per cent throughout 2009," Mr Hogan said. "The risk remains skewed towards a worse outcome, particularly if labour shedding or corporate failures intensify."In any event the job advertisement numbers indicate that the Government's unemployment forecast of 5 per cent by June 2009 is too optimistic."We expect to see an upward revision in the May budget resulting in a further deterioration in the Government's financial position."The ANZ expects the December employment figures, due to be released on Thursday, to show the loss of 21,000 jobs.In another worrying sign, foreign tourist figures released yesterday showed a sharp dip between October and November as the global economic crisis took hold, with international arrivals down 5 per cent over the year."Our tourist deficit is the biggest in two decades," CommSec equities economist Savanth Sebastian said."In November, 483,100 Australians travelled overseas while only 446,400 visitors came to our shores."
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