Australia's unemployment rate rose during April towards a 12-year high showing that the latest official cut in interest rates may have come at just the right time.
According to the latest figures from the Australian Bureau of Statistics (ABS), the nation's jobless rate rose to a seasonally adjusted 6.2 per cent in April, up from 6.1 per cent in March. The data showed that the total number of employed persons fell by 2,900 to 11.72 million, weighed down by a decrease of 21,900 full-time positions, while the participation rate remained steady at 64.8 per cent.
Although the 6.2 per cent unemployment rate recorded in April is an improvement on the 6.4 per cent recorded in January, it is still hovering around its highest level in 12 years. This is, in large part, due to a slow-down in the resources sector where companies such as Fortescue Metals Group Limited (ASX: FMG) and Worleyparsons Limited (ASX: WOR) have been cutting jobs in order to reduce costs.
Of course, corporate restructures haven't only been restricted to the mining and mining services sectors with numerous other companies also announcing job cuts to improve operating efficiencies. While Coca-Cola Amatil Ltd (ASX: CCL) has swung the axe in recent times, even Woolworths Limited (ASX: WOW) yesterday said that 400 jobs would be on the chopping block as part of its strategy to reduce costs by up to $500 million.
As it stands, confidence levels in the local economy are falling and are ultimately impacting the willingness of companies to spend. The Reserve Bank cut interest rates to a record low 2 per cent on Tuesday, which will hopefully help to rekindle the market's confidence to ignite more corporate spending and thus act as a catalyst for employment growth.
