Economists predict unemployment rate rise

Official figures to be released today are expected to show the slowing economy pushed the unemployment rate up last month.

Economists are forecasting that the jobless rate jumped from 4.1 to 4.3 per cent in September, and that no new jobs were created.

ANZ economist Katie Dean says employment growth has been strong in the last six months, despite the slowing economy, but employers are now starting to scale back their hiring.

"Employment is normally one of the last indicators to turn around," she said.

"Generally firms are more than willing to hold on to their employees until they absolutely necessarily have to make job cuts.

"Certainly we could see that extended in this cycle given that the economy has been beset by skills shortages for so long.

"Employment growth in Australia has been very strong over the last six months or so, but the leading indicators do suggest that this growth or strong growth is not going to be sustained."

Ms Dean also says the financial crisis could add to unemployment.

"As the impact of the turmoil starts to flow through to some of those sectors which are more exposed, for example finance and insurance," she said.

In August, there was a surprising fall in the unemployment rate as employers continued to hire new staff.

Unemployment up to 4.3pc

The unemployment rate has jumped from 4.1 per cent to 4.3 per cent.

Official figures just released show the number of people in work in September also rose slightly by just over 2,000.

ANZ economist Katie Dean said earlier this morning employment growth has been strong in the last six months, despite the slowing economy, but employers are now starting to scale back their hiring.


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Associate Pofesor Steven Keen. Steven Keen has come increasingly to prominence over the past couple of years specialising in the economics of Australia's spiralling household debt burden.

PROFESSOR STEVEN KEEN: Best case scenario is a recession more severe than 1990 and lasting one and a half times as long.

Worst case is something up to the level of the Great Depression which was 20 per cent unemployment and lasting up to a decade.