Unemployment Rate: An unemployment rate is the rate/number of unemployed people in a region/country.
The unemployment rate is measured by seeing how many people are unemployed out of the total population. However in some small country towns there maybe 50% of the people unemployed where as, in a city like Melbourne the unemployment rate may be 10%. This goes to show that certain areas may vary quite dramatically but the country as a whole stays between 5 and 10 percent.
The unemployment rate in December 2002 was at 6.2%. This is quite good compared to ten years ago in December 1992 when the unemployment rate was at 10.9%. Though it has been down to 5.4% in June 1981 it has seemed to vary between, 0.04% and 2% each year. A reason for Australia’s 10.9% unemployment rate in 1992 may have been that companies in Australia were closing down; another may be that Australia was importing their goods from other countries rather than buying Australian owned goods. In 1981 when the unemployment rate was down to 5.4% it may have been because there were less people living in Australia. There were more people aged between 20-50 than the children and elderly. The wage for the dole may have been lower meaning more people were trying to find work rather than sitting back and getting their wage off the government. The current unemployment rate implies that Australia’s businesses have grown or that more people are eager to find work
Interest Rate: The money paid for the use of money. If the interest rate was at 5% p.a. over one year for a $100 loan the money paid in interest would be $5.
The interest rate is measured by; Australia borrows money from overseas so in order to get that money back they make citizens pay interest on borrowed money. The government gives the banks a certain rate and then the banks raise that price again in order to make a profit. It also has to do with the monetary policy. Monetary policy is conducted by the Reserve Bank independent of the Government. The Reserve manipulates the official cash rate to directly influence other, short term and variable interest rates and thereby, the strength of demand and inflationary pressure.
The current interest rates are around 6% on average. About 5-10 years the interest rates were around double of what they are today. The reason that the interest rates vary are because of the variations of profit that the banks want to make. Some are greedy (7%) some are at a bargain price (6%). It just depends.
The indicator tells us that the current economy of Australia is doing well. Whereas around seven years ago they weren’t doing so well as the interest rates were around 10%.