Job gains continue
Employment growth continued to reflect elevated job vacancies in the two most populous states in December 2018, with seasonally adjusted employment up another +21,600 in the month.
And after a minor upwards revision to the preceding month's figures employment gains for the final quarter of calendar year 2018 were very solid at +87,000.
And after a minor upwards revision to the preceding month's figures employment gains for the final quarter of calendar year 2018 were very solid at +87,000.
Looking at the smoother trend figures, over the year employment grew +285,000 or +2.3 per cent, comfortably a strong enough level of growth to push down the unemployment rate, even if part-time employment was a fair chunk of the increase.
You can click to expand the 6 charts below.
You can click to expand the 6 charts below.
If you've been listening to many of the podcasts I've recorded lately and through 2018, you'd know that I was confident Melbourne would take pole position for jobs for the foreseeable future, largely thanks to its 'everything' construction boom.
Right on cue the strongest quarterly growth in employment was seen in Victoria (+38,000), followed by Queensland (+30,000), and then New South Wales (+11,000).
Over the year employment grew strongly in Victoria (+120,000), New South Wales (+94,000), and Queensland (+55,000).
You could just about throw a wet Captain Cook replica tarp over the rest, with Tasmania surprisingly recording negative employment growth over 2018, which I believe may prove in time to be an anomalous reading.
Unemployment falls below 5pc
Upbeat news, then, and enough to push the trend unemployment rate down to 5 per cent, the lowest level in the 91 months since May 2011.
Indeed, zooming in the chart to a 5-year timeframe the seasonally adjusted unemployment rate actually printed at under 5 per cent (notionally 'full employment') at just 4.98 per cent for the first time in 6½ years.
With an election coming right up come commentators appear keen to downplay the result, but a bit of credit here where it's due.
The seasonally adjusted unemployment rate in New South Wales is now as low as we've ever seen - at least since comparable records began more than 40 years ago in the 1970s - at just 4.34 per cent.
And look at Victoria go with an unemployment rate of only 4.15 per cent (as anticipated on this blog, by the way).
And look at Victoria go with an unemployment rate of only 4.15 per cent (as anticipated on this blog, by the way).
The smoother trend figures below confirm that more sprightly wages growth is in the post in Sydney and Melbourne.
Finally, to temper some of the excitement, although hours worked grew reasonably solidly at the end of the year, across 2018 the trend growth was far more muted at 1½ per cent, and there's clearly still slack aplenty away from the big two states.
Tightrope time
Another good result here, and the Reserve Bank almost appears to be on the cusp of pulling off an economic masterstroke when you look at the factors that will reduce debt to disposable income ratios henceforth.
These factors include wages that are set to rise in Sydney and Melbourne, hundreds of billions of dollars of interest-only mortgages switched or switching to principal repayment, markedly reduced monthly mortgage lending flows since 2016, and forthcoming tax cuts to be announced by the Coalition (though, granted, Labor has some slightly different plans).
That's about where the good news ends, though, since through over-regulation the Royal Commission has utterly crippled confidence in the banking, financial services, and real estate sectors, and most all of the forward-looking indicators are considerably more fragile than what's visible in the rear-view mirror.
Westpac expects to see that inflation sunk to just 1½ per cent in Q4, meaning that the 'target' will have been missed on the downside for three years consecutively.
NAB also announced earlier today that it was hiking its mortgage rates out of cycle, while the window for central bank hikes is quickly being slammed shut (in Australia, and quite probably globally).
The Royal Commission final report is due out a week from now, and the government will be desperately keen to manage the key messages as deftly as possible.
