Jobs rise in strong Australia economy


The Australian economy is expected to grow more than 3 percent this year.

CNN's Geoff Hiscock, Asia business editor

SYDNEY, Australia (CNN) -- Australia's buoyant economy created more than 100,000 new jobs in January, government statistics released Thursday show.

About 70 percent of the jobs were for full-time workers.

The Australian Bureau of Statistics said the number of people in work rose to 9.28 million in January, up 1.1 percent from the 9.178 million figure for December.

But with more Australians looking for work, the seasonally adjusted jobless rate rose from 6.7 percent in December to 7 percent in January.

The ABS labor figures for January were released at the same time as a private-sector survey showed a fall in unemployment expectations, meaning more people are confident about their job prospects.

Increased optimism

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It said the fall was consistent with the "sharp recovery" in job vacancies in January and increased optimism about the outlook for the Australian economy.

The institute's consumer sentiment index, released earlier in the week, supports that optimistic outlook.

The index, which measures five components of sentiment, including family finances over the next 12 months and expectations of economic conditions for the next one year and five years, rose by 0.6 percent in February.

That followed a 3.3 percent rise in January and brings to 13.4 percent the index's gains in the past four months.

After the September 11 terror attacks in the United States and the announcement of domestic job losses, the index fell 9 percent in October 2001.

Strong performer

Australia's economy has been one of the strongest performers among the world's advanced nations in the past year, courtesy of a competitive currency, a domestic housing boom fuelled by low interest rates and government subsidy, and good demand for key commodity exports.

Most economists expect the Australian economy to grow at between 3.2 percent and 3.8 percent this year, following growth of 2 percent in 2001.

In its quarterly review of monetary policy, the Reserve Bank of Australia said Monday that a "significant global recovery in 2002 is not yet assured, (but) it does appear more likely than was the case a few months ago."

The central bank has left the official interest rate unchanged at 4.25 percent this month, leading analysts to infer that the next rate movement will be up.

Most are predicting an initial rate increase of a quarter of a percentage point early in the second half of the year.

HSBC chief economist John Edwards said in a research note earlier this week that until now, employment growth had been the missing element in the "otherwise cheerful Australian economic story of the last year".

But Edwards noted that following the most recent ANZ job advertisement indicator, which rose 12.5 percent in January, employment was "ready for a bounce".

On February 4, the ANZ monthly survey showed job advertisements had reversed a 19-month downward trend, with a rise that was the largest increase since April 1997.