THE JOBLESS rate across the region has surged to its highest level in more than 18 months, sparking concerns weak conditions nationally are taking the steam out of the Hunter's economy.
Figures from the Australian Bureau of Statistics showed the unemployment rate across Newcastle and Lake Macquarie climbed to 7.2 per cent in August. It was the worst result since January 2016, when unemployment was at a high of 8.2 per cent.
A similar result was recorded in the Hunter Valley, where the jobless rate hit 7.6 per cent in August. The last time unemployment was above those levels was in November, 2015.
According to University of Newcastle economist Professor Bill Mitchell, monthly figures are often volatile and should be treated with caution. But he said the long term figures did indicate a "trend of declining employment in the region.”
"Newcastle has deteriorated against the national performance, that's for sure, and the nation itself has been pretty mediocre," he said.
August saw the national unemployment rate remain unchanged at 5.6 per cent.
Professor Mitchell said the national labour market had been slowing down over the last two years, as a result of flat wage growth, spiralling energy prices and record levels of household debt.
"All of those things impact upon spending ... when spending falls, employment falls," he said.
Professor Mitchell added that regional economies tended to be more exposed to job losses than capital cities because of their reliance on a few key industries.
When spending falls, employment falls.- Professor Bill Mitchell
Member for Newcastle, Tim Crakanthorp slammed the Coalition for presiding over a "massive increase" in the unemployment rate.
"When Labor was in power, the unemployment rate was at 4 per cent," he said. “This government boasts about jobs and growth, but clearly the reality doesn’t match the hyperbole.”
The unemployment results come off the back of grim figures published this month for the nation's retail sector, as sales posted their biggest fall in about four-and-a-half years.
Hunter Business Chamber chief executive Bob Hawes admitted the unemployment figures were disappointing, but was optimistic any downturn would not be prolonged.
"It's probably reflective of some of the flat numbers we've been seeing in industries such as retail," he said.
"As we go into the Christmas period hopefully that picks up."
Mr Hawes said millions of dollars worth of construction in the pipeline and climbing coal prices were positive indicators for the region, but there was no doubt that power price hikes were dampening spending and hitting bottom lines.
"You can't keep whacking 20 or 30 per cent increases on businesses and expect there wouldn't be a response. As far as businesses are concerned, they're battening down the hatches."
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