S'pore high-pay Minister not able to turn economy around

From: "truth"
Date: Thu, 08 Oct 2009 03:36:47 GMT
Local: Thurs, Oct 8 2009 11:36 am
Subject: Australia the lucky country

Australian Unemployment Falls, Driving Rate-Rise Bets (Update1)

By Jacob Greber
Oct. 8 (Bloomberg) -- Australia's jobless rate fell for the first time in
five months as employment unexpectedly surged, driving the currency to a
14-month high as traders bet the central bank will raise interest rates
again next month.

The number of people employed jumped 40,600 from August, the biggest gain in
almost two years, cutting the jobless rate to 5.7 percent from 5.8 percent,
the statistics bureau said in Sydney today. The median estimate of 20
economists surveyed by Bloomberg was for a decline of 10,000.

Today's report reinforces central bank Governor Glenn Stevens' decision to
unexpectedly raise interest rates this week, making Australia the first
Group of 20 nation to increase borrowing costs. Twenty-one of 23 economists
surveyed by Bloomberg yesterday say Stevens will increase the benchmark by
another quarter point to 3.5 percent next month.

"It really is quite surprising to see such strength so quickly," said Brian
Redican, a senior economist at Macquarie Group Ltd. in Sydney, one of only
two analysts surveyed by Bloomberg to forecast a gain in employment. Today's
report "is supportive of a fairly quick tightening of monetary policy."

The number of full-time jobs gained 35,400 in September and part-time
employment increased 5,200, today's report showed. Hours worked rose 0.9
percent to 1.52 billion, the highest level in seven months.

Currency Rises

Since the collapse of Lehman Brothers Holdings Inc. in September 2008,
Australia's unemployment rate has risen to 5.7 percent from 4.3 percent. By
contrast, the U.S. jobless rate jumped to 9.8 percent from 6.2 percent in
the same period.

The Australian dollar rose to 90.16 U.S. cents at 1:38 p.m. in Sydney from
89.30 cents just before the report was released. The two-year government
bond yield surged 21 basis points to 4.55 percent. A basis point is 0.01
percentage point.

The nation's benchmark S&P/ASX 200 stock index climbed 1.5 percent, taking
this year's gain to 28 percent.

Woolworths Ltd., Australia's biggest retailer, said on Aug. 25 it will hire
"thousands" of extra workers as it expands into hardware stores. Retailer JB
Hi-Fi Ltd. and Germany-based supermarket chain Aldi are also hiring as they
expand. Specsavers Optical Group Ltd. today opened a new head office and
manufacturing facility in Melbourne and said it will create 1,000 jobs in
its Australian retail network.

Chevron Gas Jobs

The government is also stoking demand for workers as it spends A$22 billion
($19.8 billion) on roads, ports, schools and hospitals. An index published
Oct. 7 by the Australian Industry Group showed the nation's building
industry expanded in September for the first time in 18 months.

The nation's single biggest investment project, the A$43 billion Gorgon
natural-gas venture in Western Australia, will create as many as 10,000 jobs
when construction starts early next year, Chevron Corp. said on Sept. 14.
Chevron and its partners say they will sell A$300 billion of gas to China,
India and Japan in the project's first 20 years.

Australia's economy has outperformed most other developed nations, expanding
1 percent in the first half of the year, and is forecast by the
International Monetary Fund to grow 2 percent in 2010. By contrast, the U.S.
economy will expand 1.5 percent next year, Japan by 1.7 percent and the euro
region by just 0.3 percent, the fund said last week.

Growth in Australia has been stoked by A$20 billion in government cash
handouts to consumers and the central bank's decision to slash borrowing
costs between September 2008 and April to the lowest level in half a

Interest Rates

Australia and Israel are the only central banks to raise interest rates
since the height of the global financial crisis. Israel is not a member of
the G-20. Governor Stevens said this week the justification for a benchmark
rate an "emergency" level of 3 percent "has now passed."

"The risk of serious economic contraction" in Australia has passed, Stevens
said in a statement on Oct. 6.

"Unemployment has not risen as far as had been expected. The board's view is
that it is now prudent to begin gradually lessening the stimulus provided by
monetary policy."

Recent reports showed retail sales, approvals to build private homes, bank
mortgage lending and property prices all jumped in August. Advertisements
for job vacancies rose in September for a second straight month, gaining 4.4
percent, an Australia & New Zealand Banking Group Ltd. survey showed this

Consumer confidence jumped last month to the highest level in more than two
years and business sentiment climbed in August to the highest level in
almost six years.

Investors have a 92 percent expectation Stevens will raise the overnight
cash rate target on Nov. 3 by another quarter point, according to Bloomberg
calculations based on interbank futures on the Sydney Futures Exchange at
1:17 p.m. Prior to today's report, they tipped a 68 percent chance of an

The participation rate, which measures the labor force as a percentage of
the population aged over 15, rose to 65.2 percent in September from 65.1
percent, today's report showed.

To contact the reporter for this story: Jacob Greber in Sydney at

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