Sydney, Jan. 16 (Bloomberg) -- Australia's economy unexpectedly added jobs for a third straight month in December, capping the strongest year of employment growth since 1989. That will underpin consumer spending, bolstering economic growth, economists say. The economy added 52,100 jobs, the Australian Bureau of Statistics said. Economists expected 7,500 positions to be lost, according to the median forecast in a Bloomberg News survey. The jobless rate rose to 6.2 percent as more people looked for work, confident of finding a job in an expanding economy. Bonds fell and the dollar gained as the report suggests the economy may maintain its almost 4 percent annual growth pace into 2003. Consumer spending is fueling growth as the worst drought in a century and a global slowdown cut farm production and exports. ``The economy hit the ground running at the start of 2003,'' said Michael Blythe, chief economist at Commonwealth Bank of Australia. ``Rising employment is good for household incomes and spending.'' For the whole of 2002, the economy added about 277,000 jobs, almost four times the number created the previous year.
Interest rates close to a 30-year low and a government grant to first-time home builders boosted consumer spending and housing construction last year. The economy expanded 3.7 percent in the third quarter from a year earlier.
Bonds Fall, Dollar Rises
Government bonds fell for the first day in three and the Australian dollar rose to close to a 2 1/2-year high after the report. The yield on the 6.5 percent bond maturing in May 2013 closed 7 basis points higher at 5.38 percent at 4:51 p.m. in Sydney, up from 5.33 percent before the report was released. The currency rose to 58.71 U.S. cents, up from 58.47 U.S. cents before the report was released. Yesterday, the currency reached 58.86 U.S. cents, its highest since Aug. 22, 2000. The economy added 49,500 full-time jobs in December following a gain of 57,300 in November. Part-time employment rose 2,500 following a 3,100 gain in November. The so-called participation rate, which measures the number of people with jobs or looking for work, rose to 64.2 percent from 63.8 percent in November. That's the highest rate on record. All figures are seasonally adjusted. The unemployment rate was 6 percent in October, its lowest since October 2000 when it was also 6 percent.
Consumer Confidence
Other recent signs the economy is expanding came in a report yesterday showing consumer confidence rose for a third straight month. Retail sales surged 1.7 percent in November, more than twice as much as expected by economists polled by Bloomberg News. Among companies planning to hire workers, Ikea, the world's biggest home furnishings retailer, said last month it will hire 300 people as it builds a new store in Melbourne. The company is spending A$100 million ($58 million) on the store, which will open in March. Still, the jobs market may slow in 2003 as drought and an expected slowdown in housing construction reduces demand for workers, economists said. Australia's economic growth rate is expected to slow to 3 percent this year from almost 4 percent in 2002, according to a Bloomberg News survey of economists. //www.quote.bloomberg.com