Australian unemployment rises to 5.8%

Australia's jobless rate edged up to 5.8 percent in August, a level not seen since the global financial crisis, with the sluggish economy shedding 10,800 jobs as the mining investment boom unwinds.

The Australian Bureau of Statistics said the seasonally adjusted rate -- up from 5.7 percent in July -- was the result of losses in full-time and part-time employment and is the highest since August 2009.

While the headline figure was in line with forecasts, analysts had expected the economy to create 10,000 jobs, while the proportion of the population in or looking for work fell, a sign that people were giving up on job-seeking.

The Australian dollar plunged half a cent to 92.91 US cents on the disappointing data, which follows the weekend election of a new conservative government that has pledged to "reboot" the economy by slashing corporate taxes.

Slowing growth in key export market China and plunging commodity prices have hit Australia's key mining sector, with the central bank warning a decade-long Asia driven resources investment boom has peaked.

Inflation was just 0.4 percent in April-June as households save rather than spend, while the economy expanding just 0.6 percent quarter on quarter in the same period.

Australia now faces a bumpy transition towards other growth drivers, with interest rates slashed to a record low 2.5 percent to stoke consumer spending and non-mining areas of the economy.

Queensland, a key coal-mining centre, saw the biggest job losses according to the ABS, shedding 5,000 positions as global oversupply sees major firms including BHP Billiton and Glencore Xstrata scale back or shutter projects.

In percentage terms, resources-rich Western Australia, home to BHP and Rio Tinto's flagship iron ore operations and the emerging gas industry, saw the biggest monthly rise in unemployment, spiking to 5.0 percent from 4.6 percent in July.

Prime minister-elect Tony Abbott has promised to return Australia to the prosperity of earlier booms by axing mining profits and corporate pollution taxes unpopular with business, as well as lowering the overall company tax rate.

But it is a steep task given China's slowdown and additional commodities supply coming online which has driven down prices and the profitability of major miners.

BHP's annual net profit slumped 29.5 percent to US$10.88 billion in the year to June, while rival Rio Tinto was down 71 percent for the first half at US$1.72 billion.

"If you look at economic growth, we're currently running below trend and as a consequence of that, there's more slack in the economy, and employment opportunities are drying up," said JP Morgan analyst Tom Kennedy.

"A big part of that is that we are seeing the investment phase of the resources boom starting to peak.

"Going forward, the level of capital expenditure is likely to decline and as a consequence, growth should be a little bit lower."

The outgoing Labor government forecast unemployment to hit 6.25 percent in 2013/14 in its pre-election budget update.

ajc/mp/dan