Australian Unemployment Falls; Stronger Dollar

Darlington Musarurwa
10 Dec, 2009
New York City

November unemployment rate decreased 0.1% to 5.7%. Export earnings from mineral resources in three months to September declined 2% as the Australian dollar strengthens. Santos Ltd declined 5% after it guided lower output in 2010.

[R]3:00 AM New York, 7:00 PM Sydney – November unemployment rate decreased 0.1% to 5.7%. Export earnings from mineral resources in three months to September declined 2% as the Australian dollar strengthens. Santos Ltd declined 5% after it guided lower output in 2010.[/R]

Australian market averages fell 0.7% despite the unemployment rate eased in November.

Commodity stocks continued to drag the market, with gold prices falling 2% to $1,121 per ounce and crude oil prices dropping 2.7% to $70.7 per barrel.

In Sydney trading ASX 200 Index decreased 0.7% or 31.2 to 4,606.70.

Of the ASX 200 index stocks, 49 gained, 136 declined, and 15 were unchanged. Independence Group led gainers in the index shares with a rise of 4.7% followed by Boart Longyear Group edging up 4.6%.

Unemployment Rate Falls to 5.7%

Australian Bureau of Statistics reported today that the seasonally adjusted unemployment rate dropped 0.1% to 5.7% in November.

The number of people employed in November increased 0.3% to 10.9 million as full-time employment jumped 30,800 to 7.6 million, while part-time employment rose 300 to 3.2 million.

According to the report, unemployment fell 13,300 to 653,100 and the number of persons looking for full-time work decreased 11,100 to 486,400.

Persons looking for part-time work dropped 2,100 to 166,700.

The participation rate fell marginally to 65.2% and aggregate monthly hours worked increased 0.9% to 1,536.3 million hours.

Resource Export Fall 2%

Separately, the statistics bureau noted that export earnings fell 2% in the three months to September on a rising Australian dollar.

Australian Bureau of Resource Economics, or Abare, reported earnings from energy and mineral resources fell to A$30.2 billion as the Australian dollar gained 10%.

Export earnings for liquefied petroleum gas advanced 47% to A$292 million, nickel rose 31% to A$833 million and liquefied natural gas edged up 8% to A$1.7 billion.

Earnings for metallurgical coal dropped 11% to A$5.5 billion, while thermal coal decreased 9% to A$3.2 billion.

Abare’s deputy executive director, Terry Sheales, said, ""Strong demand for coal and iron ore from Japan, the Republic of Korea and China underpinned record export volumes in the September quarter.”

ASX Movers

Karoon Gas Australia Ltd led the decliners in the S&P ASX 200 index with a loss of 8.5% followed by losses in Atlas Iron Limited of 5.3%, in Ausenco Limited of 5.1%, in Incitec Pivot Limited 5.0% and in Santos Limited 4.9%.

Independence Group NL led gainers in the S&P ASX 200 index with a rise of 4.7% followed by gains in Boart Longyear Limited 4.5%, in SEEK Limited of 4.4% and in Extract Resources Limited of 4.3%.

Other Movers

Atlas Iron Limited fell 5.3% to A$1.76.

Bank of Queensland Limited declined 3.4% to A$11.09 after the regional lender offered optimistic outlook for the second half of the year for the company and Australia’s economy.

BHP Billiton plc decreased 1.4% to A$39.96.

Boart Longyear Limited an integrated provider of drilling services rose 4.5% to A$0.34.

Goodman Fielder Limited fell 1.8% to A$1.58 after the agricultural company plans to sell its edible fats and oils unit to Cargill Inc. for A$240 million, as part of its strategy to focus on consumer brands.

Independence Group NL the mineral explorer and nickel miner increased 4.7% to A$4.64.

Karoon Gas Australia Ltd fell 8.5% to A$7.68.

Metcash Limited slipped 0.9% to A$4.36 after the grocery wholesaler agreed to invest A$55 million in Mitre 10 Group in exchange for 50.1% stake.

Rio Tinto Limited dropped 1.5% to A$69.80 and the metal and mineral miner said the proposed iron ore joint venture between BHP Billiton and the company is unlikely to affect negotiations for 2010 iron ore benchmark prices.

Santos Ltd declined 5% to A$13.61 after the company said the production output in 2010 is likely to be between 51 million and 54 million of barrels of oil equivalent. The output of natural gas in 2009 is estimated to be between 53 million and 56 BOE. The liquefied natural gas producer plans to shut production for 35 days to increase capacity next year.

The company also plans to increase capital expenditure in 2010 to A$2.8 billion from te previous estimate of A$1.6 billion.

United Group Limited rose 4% to A$13.20 after the company with businesses ranging from engineering to property services said that Robert Bonaccorso has assumed the role of Chief Financial Officer.