Unit 1
Unit 2
Population and Employment
The graph below shows that the unemployment rate in Australia has been falling for many years. In fact, in the early 1990s the unemployment rate in this country peaked at just over 11.0%. Strong economic conditions since that time have ensured that the positive trend seen in employment has continued for an extended period.
Between 2007/08 and 2008/09 the unemployment rate increased from 4.2% to 5.8%. While this increase was significant, the peak was much lower in Australia than was seen in other developed economies at that time. The huge economic expansion experienced by China increased their demand for fuel and raw materials. As a leading supplier of natural gas, iron ore and coal, the Australian economy was well positioned to take advantage of this situation. An increase in the demand for our exports is one of the factors that is helping to ensure that our unemployment rate has fallen.
There are also positive supply side conditions that are assisting in this process. The demand for our exports has resulted in an appreciation of the dollar, and this has made it cheaper to buy some of the raw materials used in the production process. Although interest rates increased in 2010, they were still relatively low by historical standards.
During 2010 and the first part of 2011 the unemployment rate slowly fell back to around 5.0%; however, from the middle of 2011 the emerging crisis in the Euro zone caused business managers to take a more cautious approach. After falling to 4.9% in June 2011, the unemployment rate increased to 5.3% by December of that year. These factors combined to cause the RBA to reduce the cash rate from 4.75% to 4.25% in the last two months of the year.
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