Australian jobless rate steady at 5.2%

Australia's unemployment rate remained steady at 5.2 percent in December, latest data showed, but economists said the jobs market was weakening and raised the likelihood of an interest rate cut. It came in the same as the revised November figure and compared to a consensus forecast of 5.3 percent. The Australian Bureau of Statistics on Thursday said the number of people employed fell by 29,300 to 11.4 million last month, although much of the losses were in the part-time sector while full-time jobs rose 24,500 to 8.051 million. The participation rate, or people actively seeking work, was 65.2 percent, compared with 65.5 percent in November. HSBC chief economist Paul Bloxham said: "The data shows that unemployment has been on a slow grind for some time now. "I think this is still consistent with the Reserve Bank of Australia cutting interest rates next month, which is what we expect to happen." Australia's cash rate is 4.25 percent, having been slashed by 25 basis points in both November and December. "With the participation rate falling and employment also falling, it does look as though the labour market is still softening," Bloxham added. The government has said it expects unemployment in mid-2012 to be 5.5 percent, compared with a peak of 5.8 percent at the height of the global financial crisis. Though it hovered near the five percent mark for more than a year the jobless rate has inched up in recent months, stoking fears that the economy is losing momentum, particularly outside the key resources sector. Bill Shorten, the minister for employment and workplace relations, said the jobless figures showed Australia was doing better than most nations. But Shorten, standing in as treasurer while Wayne Swan is on holiday, added that it highlighted the need to support struggling industries in the country's two-speed economy. "We see the impact of a two-speed economy in some sectors that have traditionally been large employers, such as retail and manufacturing, that there is pressure on jobs numbers," he said. "We do see growth in the mining sector and in the health sector, but it's certainly a two-speed economy. "Job growth is slowing in Australia. The mining boom is certainly helping in the short term but it is leading in part to a two-speed economy," he added.