Unemployment rate climbs 0.3% to 4.8%

Consumers’ worst fears on jobs appear to becoming true, with new data this morning showing Australia’s unemployment rate increased by 0.3% to 4.8% in January.

The result is marginally worse than expected, as most economists had predicted the rate would climb to 4.7%.

While full-time employment increased by 33,700 to 7,670,700, part-time employment decreased by 32,600 to 3,071,400.

”At the end of the day, pretty much no jobs have been created in the month, there’s been job shedding the past two months,” RBC Capital Markets economist Su-Lin Ong said.

”And we know from the forward indicators suggest a further rise in the unemployment rate in coming months.”

The participation rate (the number of people in work or looking for work) increased by 0.1% to 65.1%, compared with economists predictions of fall to 64.9%.

The rise in the unemployment rate is likely to weigh heavily on consumer confidence, which fell sharply yesterday because of householders’ fears of widespread job losses.

New data tracking consumers’ unemployment expectations confirmed the sense of fear – the unemployment expectations index rose 1.3% in February to 183.07, the highest level in 27 years.

Worried consumers keep their wallets shut, indicating tough times lie ahead for Australia’s retail, wholesale and hospitality sectors.

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