Australia Creates Most Jobs Since 2000

As we have often noted in these articles, employment is a lagging indicator of the economic cycle with job creation kicking-in once employers are confident that their order books merit an expanded workforce. The news then that the Australian economy has created more jobs last month than has been the case since well before the global financial crisis struck way back in 2000 is surely good news.

Some analysts had expected that Australian employment would grow by about 9000 jobs in February, but the reality was that this was outstripped almost by a factor of 8 with 71500 jobs created. Ironically, the Australian unemployment level has remained fixed at 5.4% of the workforce since the size of the workforce (defined as those in employment and those seeking it) also increased last month.

The fact that the global recovery is still pretty anaemic can be seen from the fact that of the 71500 jobs created, 53700 were of a part-time nature, however, the fundamental trend is positive – full-time posts came in at 17800 which was almost twice the level of (total) job creation expected by analysts.

The Australian Reserve Bank (ARB) started to ease its monetary policy in late 2011 as a means to stimulate the Australian economy in the face of stalling global demand. It would seem that the central bank’s policy of rate cutting may be baring fruit. ARB interest rates have been on hold at 3% since December 2012 – significantly higher than in most developed nations. The bank’s actions were also partially in response to fears that the mining boom that the nation has been enjoying was coming to an end. It was largely the global demand for Australian raw materials during the global financial crisis which allowed Australia to avoid falling into recession. This also led to the appreciation of the Australian Dollar as a safe-haven currency, adding to the nations difficulties as global demand faltered since it made Australian Dollar denominated exports more expensive.