Fears are rising that the unemployment rate could reach the double-digit figures seen in the last recession.It comes as Queensland-based Kleenmaid became the latest company to announce mass layoffs. Its 150 staff will lose their jobs after the upmarket kitchen and laundry appliance seller went into voluntary administration yesterday.Economists said Thursday's job figures, which jumped half a percentage point to 5.7per cent seasonally adjusted for March, showed the recession was catching up with Australia, and they are increasing their forecasts for unemployment.JP Morgan economist Stephen Walters is one of the more pessimistic, predicting unemployment will hit at least 9per cent next year, with 10per cent ''not inconceivable''. Unemployment was last in double figures in March 1994.
St George economists tip unemployment will peak at 8 to 9per cent next year, ANZ has revised its jobless high up to 8.3per cent and TD Securities economists expect a 7.8per cent rate at the end of the year.''The labour market has only just started to reflect the recession in the Australian economy. Much more pain lies ahead,'' TD economists said.CommSec chief economist Craig James, though, said NSW was dragging down the national figures, and the rest of the country was ''chugging along in third gear''.
''Comparing NSW with the rest of the country is like comparing chalk with cheese. In NSW the unemployment rate stands at a 10-year high of 6.9per cent. But strip out NSW and the national jobless rate would stand at just 5.2per cent,'' he said.Although the ACT kept the lowest jobless rate in the country, employment fell by 400 part-time positions. The trend unemployment rate rose to 2.8per cent. February's figures put it at 2.4per cent, but the Australian Bureau of Statistics revised this up to 2.7per cent in the latest data. And Chamber of Commerce ACT chief executive Chris Peters said the ACT remained significantly lower than the rest of the country.
''It shows that we continue to be somewhat insulated from the Australian situation, but it does show that unemployment will continue to increase by small amounts in the foreseeable future. ... and they might go back to 3[per cent range], but I don't expect we will go beyond that,'' he said.
Employment fell by 34,700 positions nationally after a 4200 increase in part-time workers only partially offset a 38,900 drop in full-time jobs. Unemployment rose by 52,900 to 650,900, to give the biggest monthly rise in the jobless rate since July 1991 during the last recession.It also means the unemployment rate has already gone past the Government's forecast high-point for 2008-09, of 5.5per cent.
A large reason the unemployment rate is increasing so quickly is because the participation rate remains high.
The rapid rise in the jobless rate also makes it more likely the Reserve Bank of Australia will continue cutting interest rates.
Many economists believe the official cash rate will approach 2per cent from the current 3per cent.
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