Jobs figures could trigger interest rate cuts
Interest rates may be set to decline again in August after further job losses showed Australia's economy continues to falter.
The Herald Sun reports 12,000 residents of Victoria have been made redundant so far this year, meaning the state has been one of the hardest-hit in 2012.
As a result, economists are predicting the Reserve Bank of Australia will lower interest rates by 50 points before the year is out, adding to the decrease of 125 points that has been since November 2011.
Interest rates currently stand at 3.5 per cent after being left unchanged in July, a decision that prompted ANZ Banking Group to keep its loan rates on hold. Its standard variable interest home loan rate was kept at 6.8 per cent and chief executive for Australia Philip Chronican was quoted by the news source as saying the decision was made in spite of the bank facing higher costs.
Leader of the opposition Daniel Andrews said unemployment in Victoria is cause for concern. "Unemployment is up, we have an unemployment number that is worse than the national average," he remarked, describing the latest statistics as "very bad numbers for families right across [the] state".
The total unemployment figure in the state stands at 5.5 per cent, due mostly to decline in construction, retail and manufacturing – three key industries for Victoria. The number of young people without a job was especially worrying, he said, pointing to the fact that almost one in five youths seeking employment are unable to find a role.
Retailer Myer contributed to the rising unemployment in Victoria by letting 100 staff go as part of a cost review and a company representative said the move was tough to make.
"While these decisions are never easy, they are prudent and necessary to ensure our business is attuned to our operating environment," they said.
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