Asia-Pacific

Australia's unemployment rate drops to 30-year low

(AP)
Updated: 2006-10-12 11:26

CANBERRA, Australia - Australia's unemployment rate fell to 4.8 percent in September, revisiting a 30-year low reached earlier this year, the government said Thursday.

The figure could re-ignite concerns of an interest rate hike.

More than 31,000 new jobs were created last month, the Australian Bureau of Statistics reported Thursday, well above analysts' expectations that the jobless rate would hold steady at 4.9 percent, with 5,000 new jobs. The rate takes into account seasonal factors such as holidays and varying numbers of days in the month.

Prime Minister John Howard welcomed the figures in Parliament, crediting legislation passed by his conservative government that loosens union control over workplace relations.

"This economic strength is a dividend of policies geared to preserving Australia's economic prosperity," he said. "Far from relying on luck, Australia has made its own luck in recent years."

The unemployment rate first hit 4.8 percent in July, its lowest level since the Australian Bureau of Statistics began measuring the monthly rate in August 1976. It then rose again to 4.9 percent in August.

Thursday's figures renewed concerns that Australia's central bank will raise interest rates for the third time this year, if inflation figures due next month threaten to exceed the bank's target band of 2-3 per cent.

The Reserve Bank of Australia last week left interest rates unchanged at 6 percent, in line with market expectations. The bank lifted the benchmark cash rate by a quarter of a percentage point in August, and also in May.