Job ads plunge, sharemarket surges on stimulus hopes: Economy roundup

Australian job advertisements have fallen for a seventh consecutive month, fuelling fears that unemployment could rise sharply over the next 12 months.

Australian job advertisements have fallen for a seventh consecutive month, fuelling fears that unemployment could rise sharply over the next 12 months.

According to the ANZ’s job advertisement report, the total number of job advertisements has fallen 8.6% in November from October, down to an average of just 211,199 a week.

The number is an 18.6% decline from November 2007.

Job advertisements in metropolitan newspapers fell 12%, following a 12.1% decline in October – the largest two-month drop in the survey’s 30 year history. Internet advertisements also fell 8.4% to an average of 199,433 a week.

The numbers come as analysts expect a fall of 15,000 net new jobs in the official November employment figures, due on Thursday. The unemployment rate is also expected to grow to 6% by the end of 2009.

Sharemarket rises

The bad jobs news failed to dampen investor spirits. The Australian sharemarket has opened 2.9% higher after Wall Street gains last Friday, following reports higher unemployment might spur further stimulus packages.

The benchmark S&P/ASX200 was up 114.5 points or 3.28% to 3604.4 at 12.05 AEDT. The dollar also remained steady at $US64 cents.

NAB shares jumped 4% to $20.60, while Woolworths also leapt 3.9% to $27.12. AMP gained 2.7% to $5.30. The ING Office Fund saw the biggest losses, dropping 15.7% to $0.86.

Meanwhile, troubled mining group Rio Tinto may slash thousands of jobs and postpone several projects, according to the UK’s Daily Mail.

The delays may include holding back parts of its Pilbara iron ore mines in WA, and may be announced as early as this week. The delays would be part of an effort to reduce the group’s debt levels.

Rio has been heavily sold off after BHP recently dropped a $US66 billion takeover bid, citing Rio’s $US55 million debt levels as a major factor.

Rio’s shares fell 0.6% this morning.

Handouts begin

Meanwhile, the Rudd Government’s $10.4 stimulus package is set to take effect from tomorrow. More than $4.8 billion to pensioners and $3.9 billion to families will be sent out in an effort to help jump-start the slowing economy.

The package also includes $1.5 billion for first homebuyers in the form of grants up to $21,000.

Rudd has urged families to “go out and spend the money,” during a community Cabinet meeting in Geelong.

“I see no point at all in trying to gild a lily with the Australian people. We’re in tough times; there will be tough times next year,” he says.

But Opposition leader Malcolm Turnbull has declined to urge families to spend the cash. “Every family will form its own judgement based on its own circumstances.”