Unemployment rate rises to 5.8%

Australia’s jobless rate has jumped from 5.7% to 5.8% in June, as full-time employment dropped by 21,900 to 7,611,800.

The rise was not as bad as expected by economists, who had tipped the unemployment rate would hit 5.9%.

But the sharp fall in full-time employment (and a small fall in part-time employment, down 400 to 3,150,600) indicates that the labour market is showing increased signs of weakness.

St George chief economist Besa Deda told Business Spectator that while the figures look encouraging on the surface, the fall in full-time employment told a different story.

“On the face of it, it seems quite resilient. I think if you look into the data, full-time employment is still deteriorating and part-time employment is really holding up the overall number, so that could be some evidence of under-employment occurring,” Ms Deda said.

“But certainly the unemployment rate hasn’t risen to levels that one would expect, given the mix of negatives that have occurred so far.”

Unemployment remains the big threat to Australia’s economic recovery. The Federal Government expects the unemployment rate will hit 8.5% in 2010-11, although many economists are concerned it could go higher.