Unemployment rate tipped to ease

The unemployment rate is tipped to ease to 6.2 per cent in August, from the 13-year high of 6.3 per cent recorded for July.

The unemployment rate is expected to ease from its 13-year high, mainly because of a fall in the number of people looking for work.

The number of Australians with a job is forecast to have risen by 6,000 in August, according to an AAP survey of 13 economists, after a gain of 38,500 in July.

The unemployment rate in August is tipped to fall to 6.2 per cent from 6.3 per cent the month before.

The Australian Bureau of Statistics will release its employment report on Thursday.

JP Morgan Australia chief economist Stephen Walters said it was inevitable the unemployment rate would fall after July's surprising spike.

"The NAB business survey, and consumer surveys of the labour market outcomes have suggested a stable to perhaps falling unemployment rate," he said.

The key reason why the unemployment rate rose in July was that employment growth could not keep up with population growth and the surge in the number of people looking for work.

"The employment-to-population ratio went up in July, and has been averaging higher this year, while the lift in the participation rate was very large," Mr Walters said.

The participation rate is expected to fall to 65 per cent in August, from July's two-year high of 65.1 per cent.

The latest ANZ job advertisements survey, a key indicator of the growth, showed that the number of jobs advertised on the internet and in newspapers rose one per cent in August, after a 0.5 per cent fall in July.

Job ads in the 12 months to August were up 8.7 per cent, seasonally adjusted, figures from ANZ show, but the rate of growth has been slowing since late last year.

ANZ chief economist Warren Hogan said the bounce in employment ads was encouraging but added that jobs growth in the second half of the year is not expected to be as strong as it was in the first.

"The recent strength in employment growth has been concentrated in a range of labour-intensive services industries. However, job losses in mining, mining-related construction and manufacturing are likely to weigh on employment growth over the next year," he said.

Economic growth slowed to a two-year low in the June quarter and Mr Hogan doesn't think it will get much stronger this year.

"This suggests that employment growth is unlikely to pick up meaningfully in the near term," he said.

UNEMPLOYMENT TO FALL in AUGUST

* Unemployment rate to fall to 6.2pct from 6.3pct in July

* Employment growth is tipped to be 6,000

* Employment change forecasts ranged from a fall of 10,000 to a gain of 10,000

* Participation rate forecast to fall to 65.0pct, from 65.1pct

(Source: AAP survey of 13 economists)


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Source: AAP


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