Jobless rate tipped to peak at 6.75 percent

The unemployment rate is set to peak at 6.75 percent, economists say.

The Government’s predictions for unemployment to peak at 8.5 percent in 2010/11 are unlikely to happen, according to the median forecast of five economists surveyed by AAP. The economists believe the unemployment rate will go as far as 6.75 percent, on the back of better-than-expected employment, consumer confidence and GDP figures in September.

ABS labour force data released on Thursday showed the jobless rate hit 5.8 percent in August, holding steady with the June and July results. The figures also hinted at a rise in part-time employment with the nation shedding close to 30,000 full time jobs in August, while part-time jobs increased by 3,800.

RBC capital markets economist Su-Lin Ong said: “Employers, rather than shedding their labour outright, are reducing the hours of the labour and that’s helping to temper the rise in the unemployment rate.”

However Drake International general manager of Government, Matthew Tukaki said such results could lead to a trend of “under-employment.”

Tukaki said employers need to be careful when the economy picks up and realise when the right time is to move employees from part-time or casual employment back to full time employment.

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