The speed at which the unemployment rate has surged in the past two months has raised question marks over the government\’s jobless prediction for next year.
But economists believe it makes another interest rate cut next month more likely.
Prime Minister Kevin Rudd said the spike in the jobless rate to 5.2 per cent was the result of the global recession, and would be far worse if not for the government\’s stimulus measures.
Highest rate in four years
The February result was the highest rate in nearly four years – up sharply from the 4.8 per cent recorded in January and the 4.5 per cent in December.
“Any job loss is one too many as far as I am concerned,” Mr Rudd told reporters in Canberra.
Economists doubt the Reserve Bank of Australia (RBA) will be able to sit on its hands for another month and leave the cash rate unchanged after Thursday\’s shocking data, which showed 47,100 people joined the dole queue in one month.
Jobless forecast questioned
Last month, the government forecast the unemployment rate would rise to 5.5 per cent by June and to 7.0 per cent 12 months later.
This would see an extra 300,000 people out of work.
“This is a big jump in one month, so everyone will be looking at these forecasts and questioning whether it is too low,” Opposition Leader Malcolm Turnbull told reporters in Canberra.
Finance Minister Lindsay Tanner had said on Wednesday that he was optimistic the forecasts would stand.
\’Cut payroll tax\’
Business said swift policy action was needed.
Australian Chamber of Commerce and Industry chief executive Peter Anderson said the data was “a clear warning” that the jobless rate will rise faster and steeper than the 7.0 per cent forecast.
“These rising jobless figures send a direct message to governments and the Reserve Bank,” Mr Anderson said.
“Reduce interest rates further, start cutting payroll tax, and significantly moderate the new industrial relations laws.”
Turnbull slams Rudd
Mr Turnbull said the data show the government\’s policies had done nothing to create jobs.
“Kevin Rudd is making our economic situation much worse,” he said.
“Yes there is a global financial crisis. But he is making one mistake after another. At the time he came into office he had a political strategy but no economic strategy.”
Mr Rudd was again forced to defend the government\’s stimulus packages, which provided cash handouts in December and a further round of bonuses being doled out by Centrelink now.
“If the government had sat back and done nothing and just watched, then the unemployment numbers produced today would be much worse,” Mr Rudd told parliament.
World unemployment rates high
He said unemployment numbers across the rest of the world should be taken into account.
Across the 30-member OECD, the January unemployment rate was 6.9 per cent, the G7 rate was 6.8 per cent, the European Union 7.6 per cent, and the euro zone 8.2 per cent, he said.
Thursday\’s data also showed that total employment rose by a slim 1,800 in February but with full-time employment slumping by 53,800 people.