100,000 jobs expected to go in Australia by March 2012

Investment firm, Bank of America Merrill Lynch on Tuesday predicted another 100,000 Australian jobs could be lost from the economy by March next year. Australia's biggest steelmaker BlueScope Steel on Monday confirmed it will close two of its production facilities, and cut more than 1000 jobs. This came after Qantas airline's announcement that it will cut 1,000 jobs, with OneSteel also confirming last week the loss of 400 jobs due to the high dollar and weakened export demand. Merrill Lynch strategist Tim Rocks said there are "100,000 job losses in the pipeline" and unemployment could rise from 5.1 percent to 6 percent over the next six months. "Anecdotes suggest that official employment data is lagging a material change in labour market conditions," he said in a speech, quoted by The Australian newspaper on Tuesday. "We have tallied 7000 announced job losses since June, which are unlikely to be in the official numbers yet. This would be a subset of total losses since not all layoffs are announced." He forecasted the Reserve Bank of Australia (RBA) to cut interest rates by November at the latest. The RBA's official cash rate has been at 4.75 percent since November, but a string of poor data, including a rise in the jobless rate last month to 5.1 percent from 4.9 percent, and volatile markets, has seen banks tip the RBA to cut rates in coming months. "The RBA would ease rates once it becomes aware of this new trend in the labor market -- we expect this by its November meeting," he said, adding that financial conditions in Australia are now as tight as at any time since the 1990s. Federal Treasurer Wayne Swan admitted there will be "painful adjustments" ahead for some sectors, and conceded there will be further job losses in the Australian economy. "Well certainly there will be changes in employment, there are changes in employment across sectors all the time. Our economy has evolved over years and there are always changes in employment," he told reporters in Canberra. Prime Minister Julia Gillard also said sections of the economy are under great pressure, and some traditional industries will need to change.