Asian talks aimed at securing jobs: Abbott

The jobless rate unexpectedly fell to 5.6 per cent in September as more people gave up looking for work.

Tony Abbott

(File: AAP)

Prime Minister Tony Abbott says his attendance at two summits in Asia this week is essential for securing future Australian jobs.

Mr Abbott was in Brunei for the East Asian Summit on Thursday to discuss security within the region, after attending trade talks at an APEC summit earlier in the week in Indonesia.

"Both of these meetings are essentially about trying to ensure we have the right environment to create more jobs for Australians," he told reporters.

"If we have more trade, we have more jobs, and if we continue to have strategic stability in our region, we will have more trade."

Mr Abbott's comments came as new data showed the unemployment rate unexpectedly fell to 5.6 per cent in September, which is the lowest level in four months.

Economists had expected the jobless rate to remain at August's four-year high of 5.8 per cent.

But it fell instead after the participation rate - the proportion of people in work or actively seeking employment - declined to 64.9 per cent, the lowest level in seven years.

The number of people in work rose by 9100 in September, which was less than the 15,000 predicted by economists expecting a boost from employment associated with the federal election.

Employment Minister Eric Abetz said labour market conditions remained soft.

"The government does not underestimate the huge social and economic task of growing employment opportunities in Australia and will continue to work methodically and diligently to create an environment for strong employment growth," he said in a statement.

Commonwealth Securities chief economist Craig James believes the fall in the jobless rate will be good for confidence, even though it will likely remove the need for another interest rate cut by the Reserve Bank of Australia (RBA).

"The main hope of another rate cut lies with an exceptionally strong Aussie dollar or the failure to achieve an agreement to lift the US debt ceiling," Mr James said in a note to clients.

"Provided our economy doesn't suffer from bad decisions made by US politicians, the outlook is quite encouraging."

Business confidence struck its highest level in three-and-a-half years following last month's election.

Mr James hopes this will result in companies taking on more staff, lessening the chance of the jobless rate reaching six per cent.

The International Monetary Fund has forecast Australia's unemployment rate to rise to six per cent in 2014 - which would be less than the 6.25 per cent rate predicted by Treasury in August.

On the flip side, there's almost nothing to suggest the RBA could raise interest rates any time soon.

Other data shows consumers expect the inflation outlook to remain benign, reflecting moderate economic growth in coming months.

The September quarter consumer price index is due on October 23.


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Source: AAP


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