According to research group comparator mortgage brokers were responsible for 61% of the growth in the mortgage market comparing FY 2013 and FY 2014.
JACOB GREBER The Australian Financial Review Economics correspondent reports:
Not since 2002, before the China-driven resources boom began roaring, has Australia’s jobless rate been as high as the 6.4 per cent recorded for last month.
Traders wiped almost a cent off the dollar, which fell to US92.58¢ following the release of the figure – despite warnings that it may be a “rogue” number. “The unemployment numbers are catching up with reality,” said Innes Willox, Australian Industry Group chief executive. “There is very little incentive for employers to either invest or employ. The only sector doing moderately well is housing construction. The rest is in the slow lane.”
Youth unemployment is even worse, rising above 20 per cent for the first time in 20 years and back to 1990s recession levels. While the data has been questioned because of changes in the way the Australian Bureau of Statistics determines who is hunting for work, the broader picture is one of a labour market slipping back into a soft patch. The figures prompted investors to increase bets on future Reserve Bank of Australia interest rate cuts. There is now a 32 per cent chance of a reduction by Christmas, compared with “no change” priced in ahead of the release.
A faster-than expected deterioration in jobs growth adds to the challenge facing the Reserve Bank, which is simultaneously watching the property market for signs of overheating.
Total employment barely moved in July, falling by 300 jobs, and extending a weakening trend in hiring. Payrolls grew in the first three months of 2014 at a robust monthly average of almost 30,000, but slowed to a 6900-job pace in the second quarter.
The worst hit states were Queensland and Victoria, where the jobless rate rose to 6.8 per cent from 6.3 per cent, and 7 per cent from 6.6 per cent, respectively. NSW was 5.9 per cent; South Australia, 7.2 per cent; WA, 5.2 per cent and Tasmania, 7.6 per cent.
In another blow to Australia’s international status as a stand-out among developed economies during the long downturn of the past six years, the jobless rate is now above the US rate for the first time in July since 2007.
Treasurer Joe Hockey said the figures were disappointing and underscored why Australia needed to redouble efforts to create an environment for job creation. “We need to get our economic action strategy through the Parliament and that includes the budget,” he told 3AW.
Opposition workplace spokesman Brendan O’Connor said: “Tony Abbott promised to create 1 million new jobs in five years – now he is presiding over the highest unemployment rate in Australia for more than a decade.”
Australian Chamber of Commerce and Industry chief executive Kate Carnell said the jobs report was an urgent wake-up call for government to revitalise hiring by reforming industrial relations and payroll tax. She said this was particularly urgent given one in five 15 to 19-year-olds were now out of work. “A great place to start would be addressing onerous labour market regulation and, in particular, our penalty rate regime that seriously constrains employers from providing more job opportunities,” she said. Economists, such as Justin Fabo, from ANZ Bank, said the figures were worse than expected, but questioned whether the labour market was as bad as the headline jobless rate suggests.
Changes in the sample of people surveyed by the ABS, as well as methodological changes over who it counted as looking for work, made it hard to get a clear read on the result, he said. The ABS on Thursday detailed the changes, which include counting as looking for work people who “had an interview with an employer for work,” or “taken steps to purchase or start your own business.” The bureau now also counts looking for vacancies on the internet or newspapers as an active job search. While it said there was no evidence of any impact on the employment figures, the cash-strapped bureau conceded it did not have the money to accurately measure the impact.
“The weakness…is difficult to reconcile with a range of other labour market indicators,” Mr Fabo said, pointing to a recovery in job advertisements. “We are not reading much into the extent of the weakness…it’s a case of waiting for another month of data.”
Only part of the rise in the jobless was explained by an increase in the number of people looking for or in work – also known as the participation rate, which inched up by only 0.1 percentage point to 64.8 per cent. Economists said had the figure held at the June level, the jobless rate would have been 6.2 er cent.
Still, the highest unemployment rate since before Australia’s China-driven mining boom took hold takes the number of people out of work to 789,000 and raises questions about whether the Senate log-jam over the budget is starting to affect hiring decisions.
Reserve Bank of Australia governor Glenn Stevens left the official cash rate on hold at 2.5 per cent this week, extending the period of ultra-low monetary policy stimulus into a second year.
The governor has also expressed cautious optimism that there had been “some improvements in the labour market this year.” “But it will probably be some time yet before unemployment declines consistently,” he said on Tuesday.
The Reserve Bank on Friday publishes its quarterly statement on monetary policy, including updated growth and inflation forecasts. Full-time employment rose 14,500 in July, while part-time work fell by an almost identical amount. A further sign of underlying weakness was a fall in aggregate monthly hours worked.
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