Australia’s Unemployment Rate Goes Up to 5.3%

Australia's unemployment rate rose to 5.3 per cent in November, according to data released on Thursday by the Australian Bureau of Statistics.

The jobless rate is higher from October's 5.2 per cent. Economists explained the increase in unemployment to businesses cutting costs due to the worsening global economy.

For the same month, total employment went down by 6,300 to 11.457 million and participation rate also decline by 0.1 per cent o 65.5 per cent. The employment figure was weaker than market forecasts of 10,000 jobs to be added in November.

Australians employed full-time went down by 39,900 to 8.03 million, while those on part-time employment increased by 33,600 to 3.43 million.

The figures are indicators of a softening jobs market in Australia, AMP Chief Economist Shane Oliver said.

"Until recently it was the one strong patch of the economy outside mining but quite clearly the jobs market is giving way as well," AAP quoted Mr Oliver.

"The economic outside mining has been quite weak, so companies have had to start laying off to get their costs under control," he added.

Mr Oliver said the jobs data are indicators that the Reserve Bank of Australia (RBA) may likely cut the overnight cash rate by up to 50 basis points in early 2012. The RBA just cut the key lending rate on Tuesday by 25 basis points, but the four large banks have yet to pass on to consumers the rate cut.

Brian Redican, senior economist of the Macquarie Group, agreed that the soft employment figures are reasons for the RBA to ease interest rates.

"These kinds of (jobs) numbers, the possibility of a very low inflation rate in the fourth quarter would certainly all be consistent with the Reserve Bank trimming rates once again," The Herald Sun quoted Mr Redican

"That suggests for 2012 there will be weaker consumer spending, greater downside risk for businesses and this is of course even before the full impact of the European debt crisis," he said.

Mr Redican added that due to these developments, companies would likely be reluctant to hire more people until the firms have evidence that demand is on the rise, which would not likely happen in the next few months.