Joe Hockey cautiously optimistic as economic growth rate improves
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Version 0 of 1. A surge in economic growth has made Joe Hockey optimistic about Australian jobs. The economy expanded 1.1% during the first three months of the year, raising the annual growth rate to 3.5%, its fastest pace in about two years. It is also comfortably above the long-term trend of about 3.25%, a rate that would usually take the pressure off unemployment. The treasurer’s budget in May forecast a jobless rate of 6.25% over the coming two years, a figure he said he inherited from Labor. "I'm cautiously optimistic that we won't get there," he said in Canberra on Wednesday. The unemployment rate sits at 5.8%. A strong economic result in the first three months of the year came on the back of 106,000 new jobs being created, 79,000 of those full time, Hockey said. He said of the figures: "They prove that our economy is resilient. We have a very solid foundation for future growth. But as I've said on many occasions, future growth must be earned." Hockey was encouraged by signs the expected transition from investment and construction in the resources sector to the non-mining side of the economy was under way. And his budget growth package would greatly assist the transition, he said. Exports were the biggest contribution to growth, adding 1.4 percentage points. Hockey noted this coincided with the extraordinary event that Western Australia in particular was not hit by cyclones in the March quarter. "Our miners are exporting their socks off ... they dug deep into their inventories," he said. Business inventories made the biggest detraction from growth, subtracting 0.6 percentage points. |