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Thursday, 8 August, 2002, 10:17 GMT 11:17 UK
Australian employment falls
Australian jobs web page
Australia's employment fell unexpectedly in July
Australia has reported an unexpected fall in jobs during July, which economists said reflected uncertainty over the global economy.

The news has also prompted suggestions that Australia's central bank, which has hinted at hgiher rates, would leave interest rates unchanged.

Figures from the Australian Bureau of Statistics showed total employment fell by 28,000 in July, against economists' expectations of a rise of 10,000.

The figures came despite the unemployment rate hitting its lowest level for nearly two years.

Poor outlook hits exports

Employment minister Tony Abbott said on Thursday that the slowing employment growth came against "a background of weaker international conditions and a softening in business and consumer sentiment."


The main negative at present is uncertainty about the global economic outlook which could be weighing on new hiring deicisions

Stephen Halmarick, Soloman Smith Barney

A slowing world economy could hit Australia's exporters, which account for one in five jobs in the country.

The ongoing drought and uncertainty over the reliability of the housing boom have also prompted fears that Australia's economy could be hit.

As a result, analysts say companies are becoming more cautious in their hiring of new staff.

Stephen Halmarick, director at Soloman Smith Barney, said: "The main negative outlook at present is uncertainty about the global economic outlook, which could be weighing on new hiring decisions."

Interest rate hold

Analysts also said the figures meant Australia's Reserve Bank will now be inclined to hold off raising interest rates until 2003.


Prospects remain good for a return to stronger employment growth in the medium term

Tony Abbott, Employment Minister

The central bank raised rates twice in May, to 4.75%, after they hit their lowest levels for nearly 30 years.

Amid the gloomy job data, came news that Australia had won its largest ever export deal, as North West Shelf was awarded the contract to supply liquified natural gas to China.

The contract could create up to A$25bn (8.7bn) a year in export income.

Mr Abbott remained optimistic that these and further deals meant a more secure picture would emerge in the medium term.

"Australia's economy continues to grow strongly, and prospects remain for a return to stronger employment growth in the medium term," he said.

See also:

21 Jul 02 | Asia-Pacific
09 May 02 | Business
08 May 02 | Business
07 May 02 | Business
21 Jan 02 | Business
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