Australia Jobs Jump as Victoria Opening Sparks Hiring Surge

(Bloomberg) -- Australian employers added more than twice the number of jobs forecast as the lifting of Covid-19 restrictions in the southeastern state of Victoria sparked a surge in hiring -- further buttressed by a fiscal-monetary injection from the government and central bank.

Employment jumped by 90,000 in November, versus an expected 40,000 gain, data from the statistics bureau showed Thursday in Sydney. unemployment declined to 6.8% from 7% in October, which was also the median estimate. The participation rate climbed to 66.1%, compared with a forecast of 65.9%.

Bjorn Jarvis, head of labor statistics at the bureau, said the latest data showed an ongoing strengthening in Victoria, where employment increased by 74,000 in November.

The state’s emergence from one of the world’s toughest lockdowns to contain a second Covid-19 outbreak has triggered a rapid bounce-back in activity. The national economy has exited its first recession in almost three decades and sentiment is strengthening among both firms and households.

A Westpac Banking Corp. survey showed concern about unemployment dropped 16% this month, with the measure of labor market insecurity falling to the lowest level since May 2011 in a positive sign for consumer spending.

The Australian dollar edged up a little on the data before trading at 75.78 U.S. cents at 11:56 a.m. in Sydney.

The Reserve Bank of Australia at the start of November cut interest rates and its three-year yield target to 0.10% and initiated a quantitative easing program to help contain the currency. That came a month after the government announced tax cuts, incentives for firms to invest and hire and infrastructure projects to boost activity.

Among other details in today’s jobs report:

• Monthly hours worked increased by 2.5%
• Underemployment fell by 1 percentage point in November to 9.4%; the underutilization rate, which combines unemployment and underemployment, fell 1.2 percentage points to 16.2%
• Full-time jobs rose by 84,200 and part-time roles gained 5,800
• Victoria’s participation rate increase by 1.2 percentage points in November

The economy’s outlook is clouded by a deterioration in Australia’s relationship with its largest trading partner. Beijing has imposed a series of trade restrictions on Australian agricultural products, and this week extended them to coal. At the same time, the price of iron ore is at an almost 10-year high; China is the largest buyer of the metal and Australia is the biggest producer.

©2020 Bloomberg L.P.