The drop in unemployment and what it means for you

It was announced today that the unemployment rate has dropped to 5.7 per cent, reflecting Australia’s continuing path to recovery from the global recession. The improvement came as a surprise after financial markets and economists had predicted the rate would increase to 6 per cent. Unemployment remained steady at 5.8 per cent from July to September.

The issue of underemployment also appears to be improving as 35 400 of the 40 600 jobs created in September were full-time positions.

Ben Potter, a research analyst from IG Markets, believes that the statistics released today could mean that we’ve seen the end of high unemployment for now.

‘The creation of 40 000 jobs against forecast losses of 10 000, and the unemployment rate falling to 5.7 per cent, would certainly seem to suggest we have seen peak unemployment, particularly given the positive reads from recent forward looking indicators,’ Potter told the ABC yesterday.

However, the Treasury is concerned that these gains could be prematurely curtailed if the Government’s future stimulus spending is cancelled. Treasury Secretary Ken Henry warned that a further 100 000 jobs could be lost if the Government's planned stimulus spending was scrapped.

What does this mean for you?

While we’re not in the clear yet, the emerging strong labour market means that cautious optimism is in order. If you’ve been thinking about a career change but waiting for the right time, it may be approaching – just as many companies’ hiring freezes are starting to thaw. Do some quiet research and consider your options – you might consider moving into an area where there are still skills shortages.

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