According to BBC news article, "Australia adds 71,500 which is the biggest job growth since 13 years. In February of 2013 full time employment rose by 17,800 and part time employment went up by stagnering 53,700 reported by the Bureau of Statistics when analyst had only expected only 9,000 jobs job increase. There was also a rise in the over all workforce which includes people which were employed and people who were still looking for jobs. The unemployment rate remained at 5.4%. According to the article of course with the huge job boost for the last month economic conditions seems to be getting better in Australia. Governor Glenn Stevens who heads Central Bank had been easing monetary policy since 2011 to increase job growth and the reason for that was Australia's mining boom was going decreasing during the global economic meltdown. Therefore central bank tried there best in boosting performance in other sectors of the economy however the interest rates remains at 3%. Over all economy is looking great in Australia for now since there housing market shows signs of improvement as well. However it seems like the strengthening of the Australian dollar remains the main concern because it increased more than half a cent to $1.036 as traders were fearing that there might be another interest rate cut on it's way.
Having learned about how low interest rate makes consumer wants to borrow money worked in Australia. There interest reduction probably lead to people wanting to invest in properties as well besides the job increase. When people have jobs they are more likely to buy things or invest because there is strong consumer confidence. However the demand for employment seems to be much more part time than full time in Australia right now which might lead to problems because people would rather mostly work full time than part time hours. My concern is that if the employment rate rose up so quick than how long would it last? It probably won't be sustainable for too long because how long can the central bank keep it's interest rate low.
http://www.bbc.co.uk/news/business-21781493
This seems like a particularly relevant example of monetary policy from class. This September, there will be another round of federal elections. The timing of the central banks actions and the recovery coincide nicely with these elections. Perhaps this is evidence of some of the politiquing we discussed in class (especially since the governor of the bank's term is set to expire after those elections).
ReplyDeleteAs an Aussie I really appreciated you're blog about my homeland.To add a local perspective , Australia is very heavily regulated in the banking sector. This combined with a minimum wage for adults of $16 and a free healthcare system for lower income people would probably have the folks at fox news calling Australia a Communist Regime.Even with massive regulations and a taxation rate that is more than the USA but still less than most of Europe , Australia is listed in the top 10 countries for ease of doing business as set out by the World bank every year.Australia's current prime minister Julia Gillard has had a very tough 4 years with a razor thin majority and an opposition that disagrees with everything she has enacted,including a huge mining tax on companies (to fund new education initiatives) and the developed worlds first comprehensive carbon tax plan.This employment news, she can claim for her own and it will definitely help her re-election campaign.In relation to class this week, Australia is a good example of a country with a high minimum wage and somewhat low unemployment rate.
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