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There could be scope for the Reserve Bank to cut interest rates again very soon, as unemployment gets set to rise.
According to the latest ANZ job advertisement data, job advertisements on the internet and in newspapers decreased by 0.7 per cent in October, the sixth fall in seven months.
Annual growth in total job advertisements slowed to 1.8 per cent year on year.
Speaking about the results, ANZ head of Australian economics and property research Ivan Colhoun said the weakness in both internet and newspaper advertising suggests below trend growth in employment and a gradual rise in the unemployment rate over coming months.
“Trends in job advertising are again beginning to reflect the emergence of a more noticeable geographic split to Australian economic growth. The trend in job advertising remains positive for Western Australia, the Northern Territory and Queensland (the states with the greatest exposure to mining). At the same time, advertising is continuing to slow in the more populous states of NSW and Victoria,” he said.
“ANZ expects the unemployment rate to rise to 5.5 per cent by mid-2012. This forecast is consistent with employment growth of less than 5,000 jobs per month.
“In line with a rising unemployment rate, wages and underlying inflation pressures are likely to have begun moderating. As such ANZ believes there is continued scope to ease interest rates towards a ‘neutral’ stance from the ‘more neutral’ stance at present. ANZ expects a further 25 basis point cut in the cash rate in February 2012.”
Unemployment occurs when a skilled worker or a professional who wants to work is unable to find jobs.