The unemployment rate at Australia is climbing quite high in the month of March, making for the highest in the last three years which has made the local dollar and various bonds value go low as traders add to the challenges of central bank in indulging of cuts in the rates of interest.
Statistics at Sydney show that the rate of joblessness raised to 5.6 percent from the previous 5.4 percent, considered as the highest since the year of November 2009. A survey of 24 economists of Bloomberg states that the comparison and estimation for unemployment is holding up steadily. It shows that the number of unemployment has dropped by 36,100 which are estimated to be almost five times hiked as per the forecast of economists.
The report of today makes it more challenging for the Prime Minister Julia Gillard as the Labor Party is lacking behind by 10 points to the opposition public polls in advance to the election that is scheduled on September 14th. As it is declared that general Motors Co. Holden division will be announcing cuts in the jobs very soon, the market has indicated swaps in the Reserve Bank of Australia with low borrowing costs in the month of August.
In the words of Joshua Williamson who is the senior economist of the Citigroup Inc. based at Sydney and had forecasted cuts in jobs by average 20,000, it is stated that this situation should be reinforced by policymakers to keep the labor market soft and stable. He adds that this week rounds off the data of Australia market which is suggested to help in the rebalancing of the economy including mining to other non-mining sectors smoothly. He suggests that there need to be another cut in the rates for this reinforcement.
There was a drop in the value of Australian dollar to$1.0507 in the regions of Sydney in comparison to its previous data released at $1.0537. The bonds with three years maturity got a drop to 2.81 percent from its earlier 2.88 percent in advance to the reports of the job cut.
It is speculated that traders who are priced in 52 percent holds better chance for the RBA to lower its benchmark rate at the lowest record of 2.75 percent in the month of august, as revealed by the data compiled and provided by Bloomberg. In the initial days of this week, less than 50 percent reduction was done in this month as per reports.
Governor of Central Bank, Glenn Stevens, is however estimating a softer labor market with slash in the cut rate by average 1.75 percentages within the time span of 14 months. In the month of December, there was cut in the rate by 3 percent. In this week, it is estimated that there will be 500 job cuts in average at Australia.