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Thursday, 18 May 2017

NSW approaches full employment

Part time employment up

After a blazing result last month the Labour Force figures for April 2017 again blasted expectations with another increase in employment of 37,400. 

The Reserve Bank of Australia (RBA) noted in its Minutes this week that the distinction between full time and part time employment might be of less importance than in the past, which may be just as well since this month's result was exclusively driven by part time employment.

Total employment has surged by 97,400 in only two months to a fresh high of 12,099,300 according to the seasonally adjusted series, taking year-to-date employment gains to more than 106,000. 

Annual employment growth has in turn jumped from just 0.9 per cent to 1.6 per cent in the past two months, though the trend line suggests a more moderate rate of growth at 1.3 per cent (which is about in line with national population growth). 

Tellingly, perhaps, the number of monthly hours worked did not increase, notching only 0.7 per cent growth over the last year in trend terms. 

With so much part time work abounding and little meaningful increase in hours worked, there's no doubt that once you move past the rousing headline numbers, this was only a moderately upbeat result.

Unemployment down

The seasonally adjusted unemployment rate dropped from 5.86 per cent last month to 5.71 per cent, which in rounded terms looked like a pretty tidy move from 5.9 to 5.7 per cent. 

The trend unemployment rate has been stuck in the 5.7 to 5.8 per cent range now since the end of 2015. 

I've been having some fun in recent months tracking the respective unemployment rates of a few developed countries. 

The US has seen its unemployment rate fall to just 4.4 per cent, while it was reported yesterday by Britain's Office for National Statistics (ONS) that the UK unemployment rate has fallen to a 42-year low of just 4.6 per cent.

Yet British wages are not growing in real terms, perhaps in part reflecting a trend being seen globally. 

Around the traps

In Western Australia the seasonally adjusted unemployment rate fell from 6.5 per cent to 5.9 per cent in the month of April for a welcome improvement, if partly driven by migration interstate. 

In New South Wales, meanwhile, the unemployment rate dropped from 5 per cent to just 4.7 per cent, which is arguably getting close to full employment, although here too there are few signs of wage price pressures just yet.

In South Australia on the other hand the rate of unemployment jumped from 7 per cent to 7.3 per cent.

The trend figures plotted below show the more consistent smoothed results. 

Victoria has created by far and away the greatest number of jobs over the past year at +115,600, accounting for record high population growth in the state, particularly in Melbourne.