Unemployment falls to 5% in December but jobs growth weak: Economy Roundup

The unemployment rate fell to 5% from 5.2% in December, according to the latest figures from the Australian Bureau of Statistics.

The figures show employment increased by 2,300 to 11,417,400, and that full-time employment took up 1,700 of those jobs. Unemployment decreased by 25,400 to 598,700.

The participation rate decreased by 0.2 points to 65.8%, with the aggregate monthly hours worked falling by 3.4 million hours to 1,599 million.

But CommSec economist Craig James points out these figures should be taken with “a grain of salt”, given that employment “probably didn’t creep higher by just over 2,000”.

“It’s clear that the pace of jobs growth in the early part of 2011 is likely to be more sedate. The economy has softened in the last couple of months.”

“Manufacturing, construction and the services sector are all contracting, while businesses are trimming new orders and profitability is being affected. No doubt the softer economy is ensuring that businesses remain cautious, and more importantly the November rate hike is yet to have a full impact on the domestic economy.”

He argues the figures indicate the Reserve Bank won’t likely push up interest rates “anytime soon”.

Santos shares enter trading halt

Santos shares have now been put in a trading halt ahead of an announcement regarding the company’s LNG project.

In a statement to the Australian Securities Exchange, the company said the shares would remain in a halt for a maximum of two days, with a statement coming that “may have a material impact” on the company’s share price.

According to the Australian Financial Review, the company will confirm the $US16 billion investment in the Gladstone project. The company launched an equity raising last month in order to fund its share of the coal seam gas export program.

It is expected the Gladstone project will increase the current LNG production capacity in Australia by 35%.

Wotif responds to ASX query

Online accommodation and travel booking and search site Wotif Holdings has informed the ASX that it has no response to the latest activity in the company’s share price.

The ASX pointed out that the company’s share price had fallen from $4.98 to $4.21 over the past week, although volume had also increased over that period.

Wotif general counsel Sean Simmons said the Queensland floods could have been a factor in the movement.

“The only potential explanation that the company can currently envisage is speculation about the mid-term impacts that the current floods in Queensland may have on the Queensland travel industry (both from a destination and source market perspective),” he said in a statement.

Shares higher on solid Wall Street leads

The Australian sharemarket has opened higher this morning, thanks to easing conditions in Queensland and solid leads from Wall Street, where fears over European debt concerns are beginning to subside.

The benchmark S&P/ASX200 index was up 57 points or 1.23% to 4782.1 at 12.10 AEST, while the Australian dollar has also been given a boost, moving up to US99.6c.

ANZ gained lost 1.1% to $22.97, while Commonwealth Bank shares also rose 1.4% to $51.05. Westpac gained 1.1% to $22.23 as NAB rose 1.1% to $24.05.

Transurban Group revenue rises in fourth quarter

Transurban Group has said the revenue from its toll roads recorded double-digit growth during the December quarter.

The company said proportional toll revenue for the three months to December 31 rose by 18.8% to $228.3 million from the previous corresponding period.

“The company has recorded exceptional traffic and revenue results,” Transurban chief executive Chris Lynch said in a statement.

David Jones adds 30 new brands

Department store giant David Jones says it has added Italian brands Versace and Pucci to its line-up along with 28 other local and international names.

“We have also been able to generate value and improve our gross profit margins through our category and brand mix, as well as through our negotiated terms of trade with these new brands,” David Jones general manager of fashion and beauty, Sacha Laing, said in a statement.

The company also said it is on track to reach targets with the roll-out of its 1,000 brand concept installations.

Wall Street stocks up on European hopes

Shares have gained on Wall Street after fears over European debt eased due to a healthy bond auction in Portugal.

“Europe has kept people from becoming more bullish than they would be otherwise, and the demand in the auction sets a positive tone going forward,” Bill Stone, chief investment strategist at PNC Wealth Management, told Reuters.

The Dow Jones industrial average was up 83.48 points, or 0.72% to 11,755.36.