Friday, September 10, 2010

Who's making all those jobs then?

NSW 26,000
Victoria 22,700
Western Australia 15,900
Queensland 6700
South Australia 4200
Tasmania 1000

ABS 6202.0 Trend, 3 months to August

NSW has replaced Victoria as the engine of Australia's jobs growth, creating the bulk of the nation's 31,000 new jobs in August and pushing its unemployment rate down to just 5 per cent, a rate beaten only by Western Australia.

The trend for the past three months shows NSW creating 26,000 new jobs to Victoria's 23,000, a turn around from the previous quarter when Victoria outclassed NSW two to one.

"Some things are finally going right for NSW," said Access economics director Chris Richardson. "Party it's because NSW has been sick for so long it has a lot of potential for recovery."

"Some of it has to be the finance sector. With NSW the home to many finance companies, it is where they will put on workers."

"And the wind-down of stimulus programs is hurting Victoria more than NSW. It made better use of them."

University of NSW economics lecturer Nigel Stapledon said the withdrawal of stimulus and the resurgence of mining meant a return to the old order.

"Before the financial crisis the mining boom was pushing up the dollar, squeezing manufacturers. Victoria is the centre of manufacturing... The stimulus measures shored it up but they are fading," he said.

"NSW has big chunks of mining, even South Australia has a few, but Victoria doesn't have much. We are back to where we were, with the mining states propsering at the expense of non-mining states."

Premier Kristina Keneally welcomed the return to a 5 per cent unemployment rate saying it was a "strong result for the $400 billion NSW economy and great news for NSW families
and businesses."

The NSW economy had been growing for six consecutive quarters, "more than could be said for Victoria, Queensland and Western Australia".

Rounded to two decimal places the NSW unemployment rate has slipped below 5 per cent to 4.98, the best result since September 2008, and better than the national average of 5.1 per cent.

Tasmania has the nation's worst unemployment rate at 6 per cent, Queensland and South Australia are on 5.4 per cent, Victoria 5.5 per cent, and Western Australia 4.5 per cent.

The Bureau of Statistics said while total employment climbed 31,000, full-time employment climbed 53,000, meaning around 22,000 part-time jobs were converted to or replaced by full-time jobs.

The good result would not have been influenced by the 70,000 temporary workers taken on for polling day because the August survey had asked questions about the employment in the fortnight prior to election week.

This means there should be no one-off boost in the August numbers to be retraced, making further improvements likely in September and holding open the possibility of a national unemployment rate below 5 per cent before the end of the year.

Treasury's pre-election forecasts had unemployment remaining at 5 per cent until mid next year and then sliding slowly to 4.75 per cent by mid 2012.

The faster rate of improvement yesterday had economists bringing forward their guesses as to the timing of the next rate rise, with the futures market placing a 24 per cent probability on an interest rate hike at the next Reserve Bank board meeting, up from zero a few days ago.

But the Bank itself has indicated it is relaxed about jobs growth so long as inflation remains well contained. It won't have a inflation update until its November meeting on Melbourne Cup day.

Published in today's SMH and Age

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