Unemployment fell slightly in October, but the move may not indicate a pattern.
Yesterday's figures from the Australian Bureau of Statistics show the unemployment rate has tracked downward slightly, sitting at 5.2% in October compared to the ABS' revised 5.3% for September.
In spite of the decline, managing director Robert Mellor predicted the jobless rate should remain around current levels for the near future.
“I think we’re in a flat period and we won’t see any clear trend developing until we see strength in the economy. It will bump around a bit without any clarity for awhile,” Mellor told Australian BrokerNews.
Unemployment should begin to head downward next year, Mellor predicted. BIS Shrapnel has forecast that the commodities boom will see the jobless rate fall below 4.5% by 2013 to 2014.
Mellor said the gradual pickup in jobs in the coming months could see the Reserve Bank begin considering rate hikes again.
“Whilst a lot of us feel things are pretty soft at the moment, the impact of the mining boom and a modest pickup in retail and housing should be enough for the RBA to say we don’t need another rate cut,” he said.
“I think the next three to four months that’s the way we will continue to see the numbers come through. It will be six to nine months before we see a clearer downward trend. When signs of that appear, we would expect the Reserve Bank to move back to a bias toward tightening.”
