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Employment growth in steady decline

AAP logoAAP 16/11/2016 Colin Brinsden, AAP Economics Correspondent

New figures showing a big jump in full-time employment in October and an unchanged jobless rate masks a steady decline in job creation in the past three months.

Combined with the slowest growth in wages in almost two decades, it has raised concerns among economists the labour market is losing momentum, so much so that people are giving up looking for work.

In total, 9800 jobs were added to the economy in October, but this came off a downwardly revised 29,000 drop in September.

It means employment has fallen by around 8500 on average over each of the past three months.

There was a 41,500 jump in the number of people taking on full-time work in October, partly offset by a 31,700 drop in part-time workers, reversing the recent trend towards more limited working hours.

Employment Minister Michaelia Cash said the figures clearly show the economy remains in transition from the resources construction boom to more labour-intensive services industries like retail, tourism and hospitality.

"Now more than ever it is important for the parliament to pass the government's legislative agenda to encourage economic growth and job creation," Senator Cash said.

The number of people looking for work remained at a 10-year low with the participation rate at 64.4 per cent.

Labor employment spokesman Brendan O'Connor was unimpressed, saying if not for the low participation rate, the unemployment rate would be much higher.

He said there are still 700,000 Australians who can't find any work at all and 1.8 million looking for more work.

Wednesday's figures showing annual wage growth at 1.9 per cent and the slowest rate since record began is why people are having trouble making ends meet.

"The only recipe for success the government puts forward is to provide a $50 billion giveaway to big business," he said in reference to the coalition's 10-year plan for tax cuts.

Outgoing Business Council of Australia president Catherine Livingstone said US president-elect Donald Trump's promise to cut the US corporate tax rate to 15 per cent will make the comparison to Australia's 30 per cent tax rate even more stark.

"It absolutely heightens the urgency for us to take our tax rates down," she told ABC radio.

Otherwise it will make Australia even less favourable as an investment destination.

But Labor finance spokesman Jim Chalmers believes Australians won't conclude the main take-out from Mr Trump's victory is that Australia needs to hand $50 billion to big multinational companies.

"It is no use pretending a tax cut in Australia will have an immediate or meaningful impact on investment or wages or any of those things that are claimed when the government's own figures say the only benefit would be small and down the track," Dr Chalmers told Sky News.

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