THE TEMASEK REVIEW

• Fleur Leyden
• From: Herald Sun
• March 10, 2010 12:00AM

The latest National Australia Bank survey suggests businesses shrugged off the Reserve Bank’s last three rate hikes – with confidence now back where it was in November, its strongest level since May 2002.

Business conditions also picked up in February, buoyed by improved trading and profits.

News of the upbeat mood came as the latest job advertisement survey from ANZ revealed the number of positions advertised in newspapers and on the internet notched up their biggest gain on record with an almost 20 per cent surge last month.

The strength of the data took most economists by surprise and kept the Australian dollar near US91 and close to a seven-week high.

Economists said the consistently good local news was keeping the upward pressure on official interest rates, which sit at 4 per cent.

However JP Morgan chief economist Stephen Walters said the RBA could still hold fire next month, particularly if economic news from overseas was less favourable.

“It’s very clear that interest rates are going to be quite a bit higher in a year’s time but does that mean they have to do it in the next four weeks? I don’t think we can make that judgment yet,” he told BusinessDaily.

“The RBA held fire in February – despite all the evidence that things were pretty firm.

“That was because of some of the stuff that was happening in Greece and the slowdown in China and some of the US data looked pretty awful back then.”

The next important test for Australia’s economy arrives today with the release of consumer confidence figures.

These will be followed tomorrow by official job figures from the Bureau of Statistics.

The labour market was looking healthy yesterday with the ANZ survey showing job advertisements are now just 2.3 per cent lower than last February.

ANZ chief economist Warren Hogan said the unemployment rate was likely to keep falling but noted that almost one third of Australian jobs are now part time and the total number of hours being worked across the economy remains about the same as this time last year.

“This indicates a significant degree of spare capacity … still exists among current employees in terms of their potential to increase work hours,” said Mr Hogan.

“Given the recent stellar performance of the labour market and the positive nature of current forward indicators of labour demand, we expect Australia can achieve 30,000 net new jobs this month (keeping unemployment stable at 5.3 per cent).”

NAB chief economist Alan Oster said yesterday that the unemployment rate could moderate to about 4.75 per cent by the end of 2010 and fall as low as 4.25 per cent by late 2011.

http://www.heraldsun.com.au/business/job-ads-mood-on-the-rise/story-e6frfh4f-1225838897757

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