The country’s unemployment rate rose from 3.9 per cent to 4.2 per cent in the September quarter and Michael Hill told shareholders at his recent annual meeting that the company usually receives only four or five applications for part-time Christmas work in Auckland, but there were 80 applications this year.
The situation in the United States is deteriorating rapidly with Department of Labor statistics showing that unemployment surged from 6.1 per cent to 6.5 per cent in October. The Australian Bureau of Statistics recently announced that the country’s seasonally adjusted unemployment rate was 4.3 per cent in October, unchanged from 12 months earlier. The OECD believes that Australia has more problems with labour shortages than unemployment.
Although the OECD believes Australia has a labour shortage, most forecasters are expecting the unemployment rate to increase. An increase in unemployment to this level would be disastrous because total personal debt has surged from just A$214 billion ($250 billion) in August 1993 to A$1.269 trillion at present. In the past 12 months unemployment numbers have risen by 17.0 per cent in Auckland and by 21.6 per cent in the rest of the country.
Any further increase in unemployment would have a negative impact on the housing market, consumer confidence, the retail sector and the overall economy, mainly because of the high level of personal debt. Household debt has risen substantially since unemployment peaked at 10.9 per cent in September 1991.
