Unemployment remains at 5.1% in September, Construction activity down again: Economy Roundup

The unemployment rate remained at 5.1% during September, according to new figures from the Australian Bureau of Statistics.

The figures show companies hired 55,800 full-time workers during the month, to a total of 7,984,500. Part-time employment decreased by 6,300 to 3,340,400, with total employment now over 11 million.

Male unemployment rose by 0.1% to 5%, while female unemployment decreased 0.1% to 5.2%. Aggregate monthly hours worked decreased by 0.1%, or by one million hours, to a total of 1,594.1 million hours.

“This is a tremendous result for job seekers. Plenty more people went in search for jobs in September and it appears that the majority found them. The bottom line is that the workforce has swelled, with 11.3 million Australians now holding jobs,” CommSec economist Craig James said in a statement.

“It’s not a bad result for those in work as well. The fact that employment is surging and unemployment remains super low will give people confidence. And if people are more confident, then they are more likely to spend at shopping malls, car yards and real estate offices. So the jobs result is good news for retailers and the property sector.”

Meanwhile, activity in the construction industry continued to contract in a fourth consecutive month, according to new figures from the Australian Industry Group/Housing Industry Association Performance of Construction Index.

The index fell by 2.4 points to 40.8 points during September, below the 50-point level separating contraction from expansion. The survey of 150 firms found that companies are concerned about interest rates, credit conditions and the decline of the government’s school building program.

“Construction companies continue to be plagued by weak market demand and on-going delays in project starts as private demand struggles to fill the gap left by the drying up of projects funded by fiscal stimulus measures,” AIG director of public policy Peter Burn said in a statement.

“The weakness across the construction industry in September and the discouraging near-term outlook reflected in low levels of new orders provides further evidence that the decision of the Reserve Bank not to raise interest rates was appropriate.

“Higher interest rates would be a further setback for the industry which is already suffering from a lack of demand and is trimming its labour force accordingly.”

The Government has said it is committed to a mineral resources tax, with resources minister Martin Ferguson telling ABC Radio that a committee will hold talks with mining reps and discussions will continue.

“I can guarantee that the design that has been consulted upon by the Argus committee is the design that we are absolutely committed to, and we are sticking to,” he said on ABC Radio.

Shares flat after weak Wall Street lead

The Australian sharemarket has opened slightly higher today, following a solid report on unemployment and despite a flat result from Wall Street overnight.

The benchmark S&P/ASX200 index was up 2.3 points or 0.05% to 4689.1 at 12.20 AEST, while the Australian dollar has managed to break above US98c following the release of solid unemployment data.

ANZ shares gained 0.1% to $24.10 while Commonwealth Bank shares fell 0.6% to $51.51. Westpac lost 0.4% to $23.33 as BHP Billiton shares gained 0.9% to $40.91.

The International Monetary Fund has warned housing prices may be overvalued and that household wealth will be impacted if they fall.

“Given assessed mild overvaluation, a potential correction in house prices… could hit household wealth and consumer confidence in Australia,” the IMF’s new report stated.

The comments come as several financial institutions have warned bout overheated housing prices in Australia, including American publication The Economist. The Reserve Bank of Australia yesterday welcomed a slowdown in housing prices.

Former Sydney lord mayor Lucy Turnbull has been appointed chairman of pharmaceuticals group Prima Biomed.

“I look forward to working with the board and management of Prima BioMed in enabling further research and development, so that one day there may be a viable and effective therapy for ovarian cancer that is based on Australian science and innovation,” Turnbull said in a statement to the ASX.

Bank of Queensland has said it will launch an online share trading service next year in conjunction with CMC Markets Stockbroking in order to win new customers.

“We wanted to expand our financial products offering to meet the growing needs of our active and savvy customer base,” Bank of Queensland managing director and chief executive officer David Liddy said in a statement.

“With the help of CMC Markets Stockbroking, we believe, we can now match, if not beat, the big banks on product suite, while excelling on service. It’s a great position to be in.”

US private sector loses jobs

The American economy continues to struggle, with new figures from the ADP showing private employer payrolls decreased by 39,000 jobs during September – well above the Reuters forecast for a 24,000 increase.

The release found that nonfarm payrolls will likely show zero growth during September, as the US Government continues to offload workers from the census. A separate report also showed the number of planned layoffs rose during September, consultants Challenger, Gray and Christmas said.

The news, coupled with disappointing news in the tech sector, sent the Dow Jones Industrial Average up only 2.57 points or 0.02% to 10,947.29.