Job advertisements plummet, shares slide, US unemployment rate hits 7.2%: Economy roundup

The bad news on Australia’s economy just keeps coming, with this morning’s ANZ job advertisement survey revealing that the number of job ads fell 9.7% in December – the biggest drop since the survey started in 1993.

The bad news on Australia’s economy just keeps coming, with this morning’s ANZ job advertisement survey revealing that the number of job ads fell 9.7% in December – the biggest drop since the survey started in 1993.

According to the survey, the total number of job ads plummeted 30% in 2008, putting the jobs market at “recession levels”.

The decline in December is the eighth consecutive contraction of job ads. “The rate of decline in job advertising intensified in the month of December, providing further evidence that the demand for new labour across the Australian economy is now at recession levels,” ANZ head of Australian economics Warren Hogan says.

“This is the weakest annual rate of growth in newspaper job advertising since the survey began in 1975, including both the economic recessions experienced in 1982 and 1991.”

Sharemarket slides

Meanwhile, the Australian sharemarket has lost almost 2% in a disappointing start to the trading week. The benchmark S&P/ASX200 index was down 68.2 points or 1.83% to 3667.5 at 12.00 AEDST.

NAB shares have fallen 2.7% to $20.43, while Commonwealth Bank shares dropped 1.6% to $28.34. BHP Billiton also fell 2.6% to $30.88.

Troubled investment outfit Babcock & Brown has requested a voluntary trading suspension as it waits for responses from its bankers regarding its restructure plans.

“The company is continuing discussions with its lenders. It is expected that the suspension will end when the company is in a position to make a further announcement in relation to those discussions and with information regarding the final response, which is expected to be during the week of January 26,” the company said in a statement.

If the banks don’t support Babcock, the company could well be put into administration.

Overseas news

Meanwhile, the Indian Government has installed a new board at Satyam Computer Services to help fix the damage from the country’s biggest corporate scandal.

The three-member board will meet this afternoon to discuss plans for restoring confidence of clients and staff. The company’s valuation has dropped from $US7 billion six months ago to just $US330 million.

In the US, the unemployment rate has surged to nearly a 16-year high with more than half a million jobs cut. The Labor Department says the unemployment rate has jumped to 7.2% – the highest level since 1993.

The US economy shed more than 2.6 million jobs in 2008, the biggest loss since a 2.75 million drop in 1945.

Car giant General Motors may still seek further loans to help it survive after March on top of the $US13.4 billion it has already received from the Government.

GM’s CEO Rick Wagoner says the Obama administration may provide hope for the auto industry, if the president-elect’s stimulus package includes tax credits for new cars.

Obama may have the same thing on his mind, saying on US television that last year’s $US700 billion bailout needs to be revamped to provide more credit to families and businesses.