- Daniel Martin, Capital Economics economist
Although, Australia's job market rebounded in October, the nation's unemployment rate remained steady at 6.2%, at an almost twelve-year high, a sign many businesses are reluctant to hire amid uncertain economic environment and that RBA will keep interest rates at record low for a while. According to the Australian Bureau of Statistics, the number of people employed increased by 24,100 in October, overshooting economists' forecasts for a 10,000 gain. The participation rate rose to 64.6% in October, up from 64.5% a month earlier, explaining why the jobless rate remained unchanged in the reported month even as new jobs were created.
The central bank at this week's policy meeting kept interest at a record low 2.5%, signalling that it would keep them low for some time longer. Majority economists expect the next change in rates to be up, but not until well into 2015. Rates have been at a record low for over a year amid sluggish economic growth as a decade-long mining-investment boom fades. Reserve Bank of Australia Governor Glenn Stevens reiterated that it is likely to be some time before the jobless rate falls consistently. The transition in Australia's economy after a mining boom has seen demand for labour deteriorate over the past two years, with businesses uncertain about the outlook for the economy, which has sent the jobless rate to levels higher than during the global financial crisis.
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