Australian Employment Soars for Third Straight Month

By Jacob Greber

Dec. 10 (Bloomberg) -- Australian employment soared for a third straight month as companies added six times more jobs than economists estimated. The nation’s currency rose as traders bet the central bank will keep raising interest rates next year.

The number of people employed gained 31,200 in November from October and the jobless rate fell to 5.7 percent from 5.8 percent, the statistics bureau said in Sydney today.

Reserve Bank Governor Glenn Stevens raised the benchmark interest rate Dec. 1 for an unprecedented third straight month and said this week the economy is stronger than he previously forecast. Mining companies including BHP Billiton Ltd. are taking on more workers as they increase iron-ore production to satisfy China’s demand for steel.

“It looks increasingly like the unemployment rate’s going to top out a little bit below 6 percent,” said David Forrester, a currency economist at Barclays Capital in Singapore. “That may pressure the RBA to move a little bit faster on rates.”

The Australian dollar rose to 91.53 U.S. cents at 1:33 p.m. in Sydney from 91.05 cents just before the report was released. The two-year government bond yield rose 10 basis points to 4.5 percent.

Bets on Rates

Investors are betting there is a 60 percent chance of a quarter-point increase in the benchmark lending rate to 4 percent at the central bank’s next meeting on Feb. 2, according to Bloomberg calculations based on interbank futures on the Sydney Futures Exchange at 12:10 p.m. It stood at 48 percent just before today’s report. Rates are near zero in the U.S. and Japan.

The local currency has risen 40 percent in the past 12 months, the most among the 16 major currencies tracked by Bloomberg. The Australian dollar carry trade, in which investors borrow yen, Swiss francs and U.S. dollars to invest in higher yielding assets, is helping stoke the nation’s currency, central bank official Guy Debelle said.

“The Australian dollar carry trade now again appears to be back in vogue,” the Reserve Bank assistant governor said in Sydney today. “The Australian interest-rate differential remains relatively high compared to most other major currency pairs.”

Australia’s economy shows signs of strengthening, helped by a surge in business confidence last month to the highest level in more than seven years, and increased Asian demand for iron ore, coal and gas.

Natural Gas

Chevron Corp. said Dec. 5 it has signed an agreement with Japan’s Tokyo Electric Power Co. to supply liquefied natural gas from its Wheatstone venture in Western Australia, a deal the Australian government values at A$90 billion ($82 billion). The project is forecast to generate 6,500 jobs during construction.

It is in addition to the Chevron-led Gorgon gas venture, which is forecast to create another 10,000 jobs when construction starts early next year. Qantas Airways Ltd.’s low- cost carrier Jetstar is also taking on more workers.

The number of full-time jobs gained 30,800 in November and part-time employment increased 300, today’s report showed. Employers have added 99,500 new jobs in the past three months. The median estimate of 22 economists surveyed by Bloomberg was for an increase of 5,000 jobs in November.

BHP and Rio Tinto Group boosted iron-ore production to a record in the third quarter to satisfy Chinese demand for steel, which helped exports surge 5 percent in September.

The labor market in “the mining sector is pretty much back to capacity,” Governor Stevens told economists in Sydney on Dec. 8. “There are a lot of other countries in the world who would like to have that problem.”

U.S. Unemployment

Unemployment in the U.S. was 10 percent in November, 9.8 percent among European Union countries in October, the highest level in more than a decade, and 7.8 percent in the three months through September in the U.K.

“Australia has lived up to its reputation as the ‘wonder from Down Under,’” Craig James, chief economist at CommSec, said in a note after the report was released. “The economy may not yet be going gangbusters, but Australia clearly has the strongest economy in the developed world.”

Rising consumer demand after Prime Minister Kevin Rudd’s government distributed more than A$20 billion ($18 billion) in cash to households is also prompting airlines and retailers to boost hiring.

Airline Jobs

Jetstar plans to hire 300 workers as it adds 700,000 new seats to existing routes with four extra Airbus 320 planes, the Australian Financial Review said today, citing Chief Executive Officer Bruce Buchanan.

Michael Luscombe, chief executive officer of Australia’s largest retailer, Woolworths Ltd., told Bloomberg in an Oct. 20 interview the company will hire another 6,000 workers.

Advertisements for job vacancies jumped in November by the most since May 2007, a survey by Australia & New Zealand Banking Group Ltd. showed this week.

The government is also stoking demand for workers as it spends A$22 billion on roads, ports, schools and hospitals. An index of business confidence rose in November to the highest level since May 2002, according to a National Australia Bank Ltd. survey published on Dec. 8.

“At the beginning of the year, I would not have expected the economy be looking as good as it does” now, Stevens said this week. “I thought things would turn out rather worse than they have. But who’s complaining? Not me.”

Stevens is the only central banker in the world to raise borrowing costs three times this year, predicting Chinese demand for iron ore will stoke a surge in economic growth in Australia, one of the few nations to skirt the global recession.

The participation rate, which measures the labor force as a percentage of the population aged over 15, fell to 65.2 percent in November from a revised 65.3 percent, today’s report showed.

To contact the reporter for this story: Jacob Greber in Sydney at jgreber@bloomberg.net