"It's softer than expected and disappointing. It's a sign the economy is not firing on all cylinders and there's still a need for the Reserve Bank to lower rates."
- Justin Smirk, senior economist at Westpac Banking Corp.
Australian newly-appointed government, led by Tony Abbott is facing significant challenges to revive growth in the world's twelfth largest economy, as domestic companies are firing more staff and refusing to create additional work places due to waning mining boom. The Australian Bureau of Statistics said the economy registered its first back-to-back decline in more than two years, as the number of people employed dropped 10,800 last month from July, when it fell a revised 11,400. Analysts, however, expected employment to rise 10,200. In addition to that, the overall jobless rate soared to the four-year high of 5.8%, up from 5.7% recorded in July. Figures also showed that of the total number of people, who lost their jobs in August, 2,600 of them were full time employees, while 8,200 held part-time job. On a yearly basis, the number of jobless people rose 9,400 over the same period. As the election campaign has concluded, some analysts are now expecting to see a rebound in the number of vacancies, as companies are more likely to step on investment levels. Both consumer and business confidence has already made a turn in the right direction, the latest reports showed. Despite poor situation in the labour market, low interest rates are expecting to support the struggling economy, which seems to edge higher already. Moreover, there are signs of a rebound in a key construction sector, as house prices are still rising, while the government is trying to switch to non-mining industries to drive the economy.
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