Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
Disclaimer: The Parliamentary Library does not warrant or accept liability for the accuracy or usefulness of the transcripts. These are copied directly from the broadcaster's website.
Jobs suge, unemployment falls -

View in ParlViewView other Segments

ELEANOR HALL: The economy has surprised economists again with its resilience.

Rather than a rise in unemployment figures released this lunchtime show the jobless rate
unexpectedly falling to 5.7 per cent in November.

The Australian dollar has surged in response to the figures and they also mean that another
interest rate rise in February is even more likely.

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

So Peter just how much of a surprise are these unemployment numbers?

PETER RYAN: Well Eleanor like most market economists we we're also learning to expect the
unexpected on the economy. For example the consensus was for unemployment was that it would rise
from 5.8 per cent to 5.9 per cent. Now it's gone south to 5.7 per cent.

But the big blowout is in job creation for November; the average expectation was around 5,000 new
jobs but the month on month gain is 31,200 new positions. And it's significant that more than
31,000 of these jobs were full time.

Now just looking at the states the best performing state is Victoria where unemployment is now 5.3
per cent. But I'm afraid to say the wooden spoon goes to Queensland which now has a jobless rate of
6.1 per cent.

ELEANOR HALL: Now given that unemployment is falling, is it fair to say that we've already reached
the peak now?

PETER RYAN: Well at the very least unemployment appears to have stabilised below 6 per cent. But
keep in mind this is a lagging indicator and we're yet to gauge the impact of three consecutive
interest rate rises.

But the news certainly is spectacular, given that at the beginning of this year the jobless rate
was forecast by Treasury to hit 8.5 per cent. Now even the revised expectation of around 6.5 per
cent is looking a bit pessimistic.

The Federal Government of course will take this as a very strong endorsement of its stimulus
program and the contribution it made to keeping Australia out of a technical recession at least and
averting the levels of unemployment that looked certain this time last year after the collapse of
Lehman Brothers.

ELEANOR HALL: Well you mentioned the three consecutive interest rate rises. Does this result in
unemployment when we're likely to see another one in February?

PETER RYAN: Well economists seem to be saying it's now impossible to rule out a 25 basis point rise
in February which would take the cash rate to 4 per cent. That would make an unprecedented four
consecutive hikes if that comes to pass.

And this would also be despite three of the big four banks lifting their standard variable rates in
excess of the RBA move.

Money markets believe that the rate rise is possibly on and that shows in the surge in the
Australian dollar which was up half a cent when the news came out and a short time ago Eleanor the
Australian dollar was buying 91.5 US cents.

ELEANOR HALL: Business editor Peter Ryan, thank you.