THE fastest jobs growth in three years has signalled the peak in unemployment and sparked concerns among chief executives that Australia will again be facing acute labour shortages with competition from government stimulus spending.
The jobless rate fell to 5.7 per cent in November while 100,000 new jobs, most of them full-time, had been generated in the past three months, The Australian reports.
The strength of the jobs market means the Reserve Bank is set to lift interest rates by a further 0.25 percentage points at its next meeting in February. The prospect of unemployment falling below 5 per cent next year could force interest rates higher, particularly if wages start rising.
The ANU's Warwick McKibbin, who sits on the Reserve Bank board, repeated his warning that the government's stimulus spending was too large.
"It is a good idea to have a fiscal package in co-ordination with the world, but there was no point going above what the world was doing because all it was going to do was drive up the exchange rate and crowd out exports," Professor McKibbin told a Westpac forum.
The chairman of Woodside and the National Australia Bank, Michael Chaney, was among several senior executives to warn yesterday that this was a danger, particularly with demand from resource projects.
"There is a fair chance we will have the same shortage of labour in Western Australia this year as we did before the global financial crisis, which presents a lot of positives and negatives and needs to be managed carefully," he said.
"Tradespeople will be sucked up from the south into the north and there will be a lot of pressure on wages and salaries."
Read more at The Australian online
