Australia jobless fall raises recovery hopes

Australian unemployment dropped for a third consecutive month to 5.3 percent, figures showed Thursday, stunning analysts and raising hopes that danger from the financial crisis had passed.

The January figure, down from 5.5 percent in December and the lowest since February 2009, was underpinned by a rise in workers of 52,700 - the biggest monthly surge since December 2006, the Australian Bureau of Statistics said.

Analysts had predicted a rise to 5.6 percent in January, with just 15,000 full and part-time jobs created. They said the robust data adds to pressure on the Reserve Bank of Australia to lift interest rates again next month.

"The strength of this employment growth just shows this economy has a ton of momentum behind it," said ANZ Bank strategist Tony Morriss.

Deputy Prime Minister Julia Gillard said the figures proved Australia's "strength and resilience" during the global downturn, which it weathered as the only advanced economy to avoid recession.

"Obviously we want to get Australians back to work. We will be continuing to provide economic stimulus to support jobs," Gillard told reporters.

She said parts of Australia's economy, particularly those linked to resources, were experiencing "good growth" and stimulus measures were being phased out.

But she warned that unemployment could resume climbing.

"I would be delighted if we continued to see unemployment in coming months go down but we do want to be frank ... there are still fragilities and unpredictable factors," she said.

Head of Treasury forecasting David Gruen told a Senate committee it was unclear whether unemployment had peaked "but it is remarkable to be at where we are now".

Treasury chief Ken Henry told the committee the global recession appeared to be over.

"What people have called the global financial crisis, that has passed, I think it is safe to say," Henry said, adding that "further adverse shocks" could remain for financial markets.

Australia sharply ramped up its jobs forecast in November, predicting unemployment would peak this year at 6.75 percent, instead of the 8.5 percent flagged in the May budget.

- AFP