May 12 (Bloomberg) -- Australian employers unexpectedly cut workers in April by the most since 2009 as hiring weakens in states less affected by the nation’s mining boom, sending the local currency tumbling and stocks lower.
The number of people employed declined by 22,100, after a revised 43,300 gain in March, the statistics bureau said in Sydney today. Economists in a Bloomberg News survey forecast a 17,000 increase in April, according to the median of 21 estimates. The jobless rate held at 4.9 percent.
The Australian dollar fell as much as 1.1 percent, two-year bond yields declined and the nation’s benchmark stock index sank as investors trimmed bets the Reserve Bank of Australia will raise borrowing costs next month. The RBA has held its benchmark interest rate at a developed-world high of 4.75 percent since November, prompting a decline in sales at stores including Myer Holdings Ltd.
“Consumers are more cautious since the global financial crisis and that’s feeding through to employment,” said Riki Polygenis, a senior economist at Australia & New Zealand Banking Group Ltd. in Melbourne, whose forecast for a 5,000-job drop was one of only two declines in the survey. “The mining sector is a very small employer compared with manufacturing and retail, which are struggling in the current environment.”
Full-Time Cuts
The number of full-time jobs declined by 49,100 in April, the most since February 2009, and part-time employment rose by 26,900, today’s report showed. Australia’s participation rate, which measures the labor force as a percentage of the population over 15 years old, fell to 65.6 percent in April from 65.8 percent a month earlier, it showed.
Last month’s decline in jobs brings to 26,300 the number of net new positions created in the first four months of the year, the weakest January-through-April period of employment growth number since 1999.
The yield on two-year government notes dropped 8 basis points, or 0.08 percentage point, to 4.98 percent, the biggest decline since April 19. The Australian dollar slid 0.6 percent to $1.0634 at 1:28 p.m. in Sydney. Australia’s S&P/ASX 200 Index dropped as much as 1.6 percent to 4,703.10.
Asian Demand
Today’s report reflects surging Asian demand that is stoking investment in resource projects and helped send the currency this month to the highest level since it was floated in 1983.
A government report released last week showed retail sales unexpectedly fell 0.5 percent in March, the first decline in five months, and sales adjusted to remove inflation were unchanged in the three months through March 31 from the previous quarter.
Employment rose 22,900 in Queensland and Western Australia, states that are the biggest participants in the largest mining- investment boom in the country’s history. The number of jobs in New South Wales and Victoria, home to Australia’s two most populous cities, dropped by 56,200, today’s report showed.
“There are clear signs that the Aussie economy is losing momentum,” Savanth Sebastian, an economist at Commonwealth Bank of Australia in Sydney, wrote in a report after the release. “The latest result is also consistent with the anecdotal evidence we are hearing from businesses outside the mining sector.”
Myer and David Jones Ltd., Australia’s biggest department store chains, yesterday reported declines in quarterly sales.
Falling Sales
Melbourne-based Myer’s sales fell 2 percent to A$657 million ($698 million) in the three months ended April 30, and Sydney-based David Jones, the second-largest chain, posted a 1.4 percent drop in revenue to A$411.7 million in the same period. Both companies were reporting third-quarter results.
Traders bet there’s a 10 percent chance central bank Governor Glenn Stevens will boost rates by a quarter of a percentage point to 5 percent next month, down from 24 percent before the jobs report, bank bill futures showed.
Australia’s government said this week that it will end 23 years of spending growth to ease inflation from the mining boom and support the return to a budget surplus.
Prime Minister Julia Gillard’s administration is trying to reduce the need for higher borrowing costs for consumers and businesses after the central bank said last week that higher rates will likely be needed “at some point” to contain inflation.
The RBA has increased rates by 175 basis points to 4.75 percent since October 2009. In contrast, the U.S. Federal Reserve has held its benchmark rate near zero since December 2008. That divergence contributed to about a 19 percent increase in the local dollar versus the U.S. currency in the past 12 months.
The RBA said in its May 6 quarterly policy statement that “most leading indicators point to further growth in employment over the months ahead, although at a slower pace than in 2010.” It also predicted the jobless rate would fall to 4.25 percent by December 2013.
To contact the reporter on this story: Michael Heath in Sydney at mheath1@bloomberg.net
To contact the editor responsible for this story: Stephanie Phang at sphang@bloomberg.net
Find out more about Bloomberg for iPhone: http://m.bloomberg.com/iphone/
The number of people employed declined by 22,100, after a revised 43,300 gain in March, the statistics bureau said in Sydney today. Economists in a Bloomberg News survey forecast a 17,000 increase in April, according to the median of 21 estimates. The jobless rate held at 4.9 percent.
The Australian dollar fell as much as 1.1 percent, two-year bond yields declined and the nation’s benchmark stock index sank as investors trimmed bets the Reserve Bank of Australia will raise borrowing costs next month. The RBA has held its benchmark interest rate at a developed-world high of 4.75 percent since November, prompting a decline in sales at stores including Myer Holdings Ltd.
“Consumers are more cautious since the global financial crisis and that’s feeding through to employment,” said Riki Polygenis, a senior economist at Australia & New Zealand Banking Group Ltd. in Melbourne, whose forecast for a 5,000-job drop was one of only two declines in the survey. “The mining sector is a very small employer compared with manufacturing and retail, which are struggling in the current environment.”
Full-Time Cuts
The number of full-time jobs declined by 49,100 in April, the most since February 2009, and part-time employment rose by 26,900, today’s report showed. Australia’s participation rate, which measures the labor force as a percentage of the population over 15 years old, fell to 65.6 percent in April from 65.8 percent a month earlier, it showed.
Last month’s decline in jobs brings to 26,300 the number of net new positions created in the first four months of the year, the weakest January-through-April period of employment growth number since 1999.
The yield on two-year government notes dropped 8 basis points, or 0.08 percentage point, to 4.98 percent, the biggest decline since April 19. The Australian dollar slid 0.6 percent to $1.0634 at 1:28 p.m. in Sydney. Australia’s S&P/ASX 200 Index dropped as much as 1.6 percent to 4,703.10.
Asian Demand
Today’s report reflects surging Asian demand that is stoking investment in resource projects and helped send the currency this month to the highest level since it was floated in 1983.
A government report released last week showed retail sales unexpectedly fell 0.5 percent in March, the first decline in five months, and sales adjusted to remove inflation were unchanged in the three months through March 31 from the previous quarter.
Employment rose 22,900 in Queensland and Western Australia, states that are the biggest participants in the largest mining- investment boom in the country’s history. The number of jobs in New South Wales and Victoria, home to Australia’s two most populous cities, dropped by 56,200, today’s report showed.
“There are clear signs that the Aussie economy is losing momentum,” Savanth Sebastian, an economist at Commonwealth Bank of Australia in Sydney, wrote in a report after the release. “The latest result is also consistent with the anecdotal evidence we are hearing from businesses outside the mining sector.”
Myer and David Jones Ltd., Australia’s biggest department store chains, yesterday reported declines in quarterly sales.
Falling Sales
Melbourne-based Myer’s sales fell 2 percent to A$657 million ($698 million) in the three months ended April 30, and Sydney-based David Jones, the second-largest chain, posted a 1.4 percent drop in revenue to A$411.7 million in the same period. Both companies were reporting third-quarter results.
Traders bet there’s a 10 percent chance central bank Governor Glenn Stevens will boost rates by a quarter of a percentage point to 5 percent next month, down from 24 percent before the jobs report, bank bill futures showed.
Australia’s government said this week that it will end 23 years of spending growth to ease inflation from the mining boom and support the return to a budget surplus.
Prime Minister Julia Gillard’s administration is trying to reduce the need for higher borrowing costs for consumers and businesses after the central bank said last week that higher rates will likely be needed “at some point” to contain inflation.
The RBA has increased rates by 175 basis points to 4.75 percent since October 2009. In contrast, the U.S. Federal Reserve has held its benchmark rate near zero since December 2008. That divergence contributed to about a 19 percent increase in the local dollar versus the U.S. currency in the past 12 months.
The RBA said in its May 6 quarterly policy statement that “most leading indicators point to further growth in employment over the months ahead, although at a slower pace than in 2010.” It also predicted the jobless rate would fall to 4.25 percent by December 2013.
To contact the reporter on this story: Michael Heath in Sydney at mheath1@bloomberg.net
To contact the editor responsible for this story: Stephanie Phang at sphang@bloomberg.net
Find out more about Bloomberg for iPhone: http://m.bloomberg.com/iphone/
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