Unemployment drops to 5.1%, Qantas cuts 500 jobs: Midday Roundup

The Australian unemployment rate has fallen to 5.1%, beating expectations and driven by an increase in part-time employment.

The Australian Bureau of Statistics said this morning that the unemployment rate had fallen 0.1 percentage points, with part-time employment lifting by 34,000 to 3.4 million and full-time employment up by 12,3000 to 8.063 million. Economists surveyed by AAP had tipped full-time jobs would increase by 12,000.

“The increase in seasonally adjusted part-time was driven by an increase in female part-time employment, whereas the increase full-time employment was driven by an increase in male full-time employment,” ABS said.

The number of people unemployed fell by 15,300 last month to 614,200, and the labour participation rate edged up 0.1 percentage points to 65.3%.

The statistics bureau added that although recent reports have suggested 2011 was the year with the lowest employment growth since 1992, this statement does not take into account estimations that population growth last year was the lowest in 10 years.

“An alternative method of analysis that removes the effect of population growth is to compare average employment to population ratios for each year.”

“In 2011, the employment to population ratio was 62.2%, which is the third highest rate of employment in the last 30 years, up 0.1 percentage points from 2010 and 6.1 percentage points higher than the low in 1992.”

Qantas cuts 500 jobs, flags another challenging half after 83% profit fall

National carrier Qantas says it will cut 500 jobs as it posts an 83% fall in half-year profit to $42 million and flags another challenging half.

Underlying profit before tax was $202 million for the first half, and revenue rose by 6% to $8.048 billion.

CEO Alan Joyce said Qantas would provide “maximum support to affected employees, including opportunities for redeployment, voluntary redundancy and external employment.”

The company added that fuel prices remain high and it faces pressure from strong competitor growth and cost disparity with competitors, in addition to the uncertain economic environment.

“While the group’s financial position remains strong, with significant cash reserves and an investment-grade credit rating, this outlook requires disciplined financial management and a continued focus on maximising productivity.”

No interim dividend was declared.

Wesfarmers FY profit flat, with discounting taking its toll: Analyst

Meanwhile, coal-to-supermarket conglomerate Wesfarmers has posted a $1.176 billion full-year profit, flat on last year, and says it’s optimistic about the year ahead,

Revenue was up 5.7% to $29.67 billion, with a 70 cent dividend declared.

Market analyst Ben Le Brun said the “heavy discounting in the supermarket and consumer discretionary arms” were taking their toll, after aggressive revenue and profits over recent years.

“Looking forward Wesfarmers said that they expect price deflation in supermarkets to continue into the second half but are confident on overall earnings in the retail sector. It is believed that Coles and Woolworths may have to turn their focus into Asia to continue to grow,” Le Brun, of optionsXpress, said.

Sharemarket opens lower on Greek fears

The Australian sharemarket has opened lower this morning after more fears Greece may be moving closer towards defaulting on its debts.

The benchmark S&P/ASX200 index was down 60 points or 1.4% to 4192.8 at 12.00 AEST, while the Australian dollar was down to $US1.06c.

In the United States, the Dow Jones Industrial Average fell 97.3 points or 0.8% to 12,781.03.