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Jobs figures defy economic concerns -

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Jobs figures defy economic concerns

The World Today - Thursday, 6 November , 2008 12:22:00

Reporter: Peter Ryan

ELEANOR HALL: To the broader economy now and there's been a surprise surge in Australian
employment, despite the concerns about a slowing economy.

According to the official figures released late this morning, the number of people in jobs rose by
more than 34,000 in October, defying expectations of a decline. And the unemployment rate has
remained steady at 4.3 per cent.

I'm joined in the studio now by our business editor Peter Ryan.

Now, Peter, a rise in the number of Australians in jobs. Where are we seeing this?

PETER RYAN: Economists, Eleanor, had been expected jobs to fall by 10,000 in the month of October,
but as you said, the ABS is reporting an increase of 34,300 to 10.76 million.

Now this has come about because of a fall in full-time employment of 9,200 while part-time
employment is up by 43,500.

Now that's created a slight increase in the participation rate to 65.3 per cent up from 65.1 per
cent in September and unemployment remains at a 33-year low of 4.3 per cent. Economists had been
expecting 4.4 per cent - and they have been looking for a sign that those days of record low
unemployment were fading with the economy

ELEANOR HALL: Well that sign is not there this month. Why are we seeing not a contraction in jobs
but the reverse, or is part-time, are part-time jobs masking these figures?

PETER RYAN: Well, the big issue here is that these are lagging figures, and employment is the
biggest lagger.

They traditionally reflect the strength of an economy six months or so ago and the raw data
certainly doesn't fit with the various business surveys and anecdotal evidence that really does
underline a slowdown in the Australian economy.

But once again the key figure is full-time employment rather than the helicopter view of all jobs
including part time and casual.

And it's worth noting that in these figures, this is the second straight month of falls in
full-time employment, repeat full-time employment, and that hasn't happened in over three years.

But we have seen a lot of economic stimulus over the past few months - record income tax cuts,
falling interest rates, government cash handouts and continuing commodity exports to China. Perhaps
that's all combined to helped stem any panic about a global slowdown and to maintain confidence
that the Australian economy will be able to avoid a recession.

So the underlying message is that the economy is better placed than most other countries to deal
with the array of negatives that we are seeing at the moment.

ELEANOR HALL: And how has the share-market reacted to the figures?

PETER RYAN: The share-market was already down quite sharply even before these figures hit. There
was a five per cent plunge in late trading on Wall Street this morning despite earlier elation
about Barack Obama's election victory.

As a result the Australian share-market has taken a direct hit. A short while ago the
All-Ordinaries Index was 3.4 per cent lower or 149 points weaker at 4141.

We've seen BHP Billiton down 2.1 per cent on fears of a prolonged slowdown and Rio Tinto is down
seven per cent and it has taken a big hit given slumping commodity prices and of course, the big
four banks are following the lead of financial stocks down on Wall Street. They are all around one
per cent lower.

ELEANOR HALL: And Rupert Murdoch's News Corporation has taking a hit as well. What is driving that?

PETER RYAN: News Corporation has downgraded its full-year outlook due to weak advertising and the
impact of the strengthening US dollar.

The downgrade came as News Corporation posted a 30 per cent drop in quarterly profit. The news and
entertainment company which Rupert Murdoch has built up over the last 50 years has also flagged job
losses at some of its Australian operations, which includes mastheads such as the "Daily
Telegraph", the "Australian", the "Herald Sun" in Melbourne.

A short time ago, News Corporation stock was down 21 per cent on that news of the downgrade.

ELEANOR HALL: And how is the Australian dollar looking?

PETER RYAN: Slightly weaker, Eleanor, at 67.6 US cents and that is on the expectation that the
outlook for unemployment is going to mean that interest rates will fall and jobs will eventually
come under pressure.

ELEANOR HALL: Business editor Peter Ryan, thank you.