Fed: Low jobless rate masks weak employment figures

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Fed: Low jobless rate masks weak employment figures

By Jim Hanna, Economics Correspondent

CANBERRA, Aug 8 AAP - Australia's employment situation soured today despite the joblessrate falling to its lowest level in nearly two years.

The number of people in paid work fell by 28,300 in July to 9.29 million, the AustralianBureau of Statistics (ABS) said.

But a bigger fall in the number of people looking for work saw the unemployment ratetumble from 6.5 per cent to 6.2 per cent, its lowest level since October 2000.

The participation rate - the percentage of people over 15 working or looking for work- dropped from 63.7 per cent in June to 63.3 per cent last month, its lowest level sinceJanuary 2000.

Australian Democrats employment spokesman John Cherry said the unemployment rate wouldbe more than seven per cent if the participation rate was up around last year's levels.

Prime Minister John Howard said there were mixed signals in today's figures.

"We have recovered a lot of jobs, we have seen a pick-up in the economy," he told reportersin Sydney.

"Whether that continues and whether unemployment goes lower, I don't know.

"There are mixed signals, some signs of softening, there are some signs of continuing strength."

Employment Minister Tony Abbott said job growth had clearly slowed in recent months,but prospects of stronger growth in the medium term were good.

"Sure, today's figures are a mixed bag, but I think we can be reasonably confident,notwithstanding the international difficulties, that the Australian economy is still inpretty good shape," he told reporters in Melbourne.

Labor's employment spokeswoman Jenny Macklin said the government was not doing enoughto give jobseekers hope.

"All Tony Abbott can offer Australia's 609,000 unemployed is some vague hope for astronger economy in the future," she said in a statement.

"That is totally unacceptable, particularly when you have the Treasurer warning oftough times ahead."

Full-time jobs fell by 17,900 last month to 6.635 million, their lowest level this year.

"(The government) has overseen a dramatic shift in the mix of new jobs from full-timeto part-time and casual positions," Ms Macklin said.

Only 38.2 per cent of jobs created under the Howard government were full-time, comparedwith almost 60 per cent in Labor's last term, she said.

Economists, who expected job growth of 10,000, said the weaker than expected resultvindicated the Reserve Bank of Australia's decision to wait before lifting interest ratesback to neutral levels.

"Our current domestic rate call would have to be that rates are on hold for the restof the year," BT economist David Lewis said.

AAP jph/kjp/cjh/sb

KEYWORD: ECONOMY NIGHTLEAD