Australia Struggled to Add New Jobs in 2011

Marcus Jacob
19 Jan, 2012
New York City

Australian economy struggled to add new jobs in 2011, its worst annual performance in nearly two decades. The unemployment rate was flat at 5.2% in December after employers cut net 29,300 jobs. Insurance stocks led the decliners in trading today.

[R]8:00 PM Sydney – Australian economy struggled to add new jobs in 2011, its worst annual performance in nearly two decades. The unemployment rate was flat at 5.2% in December after employers cut net 29,300 jobs. Insurance stocks led the decliners in trading today.[/R]

Australian stocks were flat as world markets sentiment wavered after the International Monetary Fund, the lender of last resort, was reported to be in talks to raise more than $500 billion.

Market sentiment was on the back foot on the worries that the two speed Australian economy may not generate enough jobs after the release of the December employment data.

The ASX 200 index closed down 3.1 or to 4,214.8 and All Ordinaries index decreased 2 to 4,278.6.

The Australian dollar edged lower 0.1% and closed at US$1.037.

Unemployment Rate Flat at 5.2%

Australian Bureau of Statistics said employers eliminated net 29,300 jobs in December, largely on the cuts in temporary staff. The monthly decline was the worst since April and the second decline of close to 30,000 job losses in nearly a decade.

The two speed Australia’s economy failed to create any new job in the entire 2011 after generating 370,000 jobs in 2010 and worst job creation year in 19 years.

For the month, unemployment rate was steady at 5.2% and was unchanged from the downwardly revised monthly rate in November.

Male unemployment rate in the month declined 0.2 percentage point to 5% and the female unemployment rate increased 0.1 percentage point to 5.5%.

The jobless rate increased in New South Wales to 5.6% and in Victoria declined to 5.2%. The rate in Queensland dropped to 5.4% and in Western Australia was unchanged at 4.3% for the second month in a row.

Stock Movers

BHP Billiton Ltd added 34 cents to $37.34 and Rio Tinto Ltd increased $0.15 to $66.75.

Miners traded higher on the hopes that copper prices in London trading gained on the hopes that the IMF will be able to raise at least $500 billion to loan to the troubled euro zone nations.

Fortescue Metals Group increased 1 cent to $5.06, Lynas Corporation Limited closed up 9 cents to $1.15 and Iluka Resources increased 33 cents to $16.83. Newcrest Mining fell 7 cents to $32.70.

Oil Search Limited traded up 7 cents to $6.55, Santos Limited closed up 4 cents at $13.25 and Woodside Petroleum decreased 63 cents to $33.48.

Commonwealth Bank of Australia fell 4 cents to $49.80 and ANZ increased 3 cents to $20.82 and Westpac inched higher 3 cents to $20.50. National Australia Bank increased 22 cents to $23.88.

David Jones Limited closed flat at $2.36 and Wesfarmers Limited decreased 11 cent to $30.27. Harvey Norman Holdings closed up 4 cents $2.02.

Woolworths Limited closed down 34 cents to $25.13 and JB Hi-Fi Limited decreased $0.20 to $11.69. Billabong International Ltd closed unchanged at $1.81 and Kathmandu closed up 1 cent to $1.25.

Qantas Airways Ltd fell 1 cent to $1.52, Virgin Australia rose 0.5 cent to 31 cents and Flight Centre added 19 cents to $18.55.

Insurance stocks were lower on the worries that more earnings may be lower than expected in the next three quarters as the companies struggle with rising costs and difficult capital markets environment.

QBE Insurance Group Limited decreased $0.28 to $11.20 and Insurance Australia Group was flat at $2.95.

QR National fell 2 cents to $3.72.