Although it’s performing better than those of many other industrialised nations, the Australian economy has one or two weaknesses that threaten to undermine its relative progress. The unemployment rate in January had remained at a respectable 5.4%, with a net gain of 10,400 new jobs being recorded, while 65% of the population were deemed eligible to work.
It’s believed that the main reason why unemployment actually fell is that the proportion of people in Australia who were deemed able to work in full or part-time jobs fell by 0.1% from 65.1% in December. This suggests that all is not well for the Australian economy despite the fact that unemployment here is lower than in many other big economies.
“We do not believe the number is likely to please the Reserve Bank of Australia (RBA) and there may be more cause for caution than optimism despite global risk sentiment rising”, said a spokesperson for FX Solutions, who specialise in trading forex. Caution is something that’s likely to continue for the foreseeable future, especially when it comes to employment data.
In order to stave off the threat of recession, the RBA took measures to help stimulate growth and boost employment figures. The most notable measure was the lowering of interest rates to 1.75%, which has remained at that level since November 2011. It was done to try and help industries including construction to help cope with growing demand from China, a key trade partner.
Some parts of Australia experienced actual growth, while other states were a little less fortunate. Queensland saw employment rise by 30,000, while Victoria fared worse by losing a similar amount of jobs in the past month. Some industries including mining are performing very well as the result of global demand, while manufacturing appears to be suffering.