Australian unemployment rose last month as growing confidence saw job-seekers return to the market, data showed Thursday, but the government warned of a further rise as stimulus money wore off.
The only advanced economy to avoid recession in the global downturn, Australia has seen its jobless figure hold steady since May helped by multi-billion dollar government pump-priming measures.
Data from the Australian Bureau of Statistics (ABS) showed the country's unemployment rate edged up to 5.8 percent from 5.7 percent in October.
It said 24,500 extra jobs were created, although that was outstripped by a surprise jump of 35,000 in the number of people looking for work.
The modest rise back to August jobless levels reflected a fairly consistent picture of employment since May, said AMP Capital Investors chief economist Shane Oliver.
"There were still basically more people entering the labour force than jobs created thanks to population growth and people getting more confident and coming back to look for work," Oliver told AFP.
He said the labour force surge of 35,000 was an "unusually high number" and would be vital as resource-rich Australia gears up for an expected mining boom.
Most of the new jobs made in October were part-time positions, which grew by 21,500, while full-time jobs rose by 2,900, the ABS said.
Despite the upbeat news, Treasurer Wayne Swan warned that unemployment, a lagging indicator of economic growth, would continue to climb as the effects of the global crisis unwound.
"I think the increased unemployment of Australia today shows what a substantial challenge we still have on the employment front," Swan said at the Asia-Pacific Economic Cooperation (APEC) forum in Singapore.
"That's why the government is so determined to maintain our economic stimulus as we go forward," he added.
Canberra this month sharply upgraded its growth and jobs forecasts, tipping unemployment to peak at 6.75 percent in mid-2010, instead of the 8.5 percent flagged in the May budget.
Swan said many people were working reduced hours and the government expected a further 100,000 people to lose their jobs before unemployment peaked.
But economists said strong growth in jobs -- 75,100 since June -- showed unemployment may already have peaked.
"It is possible that we are currently at the unemployment rate peak... this has significant implications for the health of government accounts and monetary policy," said Adam Carr, senior economist at ICAP.
Citigroup economist John Williamson agreed the government's jobless forecast now appeared too pessimistic and the peak was likely closer to 6.0 percent, an "incredible performance by Australia from a global perspective."
CommSec chief economist Craig James said the result made it "almost certain" Australia's central bank would hike rates for a third consecutive month in December.
Unemployment fell unexpectedly for the first time in five months in September to 5.7 percent, following world-beating economic growth of 0.6 percent in the three months to June.
Australia was the only major Western nation to avoid a recession and last week raised interest rates for a second successive month to 3.5 percent.
The Australian dollar surged on the news, reaching a 15-month high of 93.6 US cents immediately after the figures were released.
INTERNATIONAL NEWS
Aust unemployment rises to 5.8 pc
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