The must read articles of the week

Find them here at Property Update.

By the way, have you signed up for this year's Wealth Retreat yet?

It's coming up soon at Gold Coast - I can't wait!

Slacking off

Unemployment levitates

So much slack still around in the labour market.

The number of unemployed persons is actually rising in 6 of 8 jurisdictions. 

Still thinking that the next move in interest rates could yet be down, with inflation and wages growth failing to ignite. 

Have a great weekend all! 

Business Insider Australia - behind the scenes

Sydney podcast

Down to Sydney today, to record with Business Insider.

Here's a 30-second look 'behind the scenes' at Business Insider Australia.

David Scutt gets ready to record one of the most popular podcasts in Australian business circles, Devils & Details. 

Recorded in one take, thanks to Rick S, the sound guy.

Ready to record with Editor-in-Chief, Paul 'Colgo' Colgan.

Always great fun to catch up with these guys and talk finance.

And the verdict...

Scutty loses it.

In all seriousness, this is a terrific episode, with stacks of great content.

Tune in tonight at Business Insider Australia from around 9pm.

I'll post a link later.

NSW jobs super-boom continues apace

Annual employment growth slowing

A solid headline result for employment growth in April 2018, beating expectations of 20,000, with total seasonally adjusted employment up by 22,600 to beyond 12½ million for the first time, driven by a substantial 32,700 increase in full time jobs.

There were, however, adverse revisions to take into account for the preceding month. 

Alas, the Coalition's favoured '1000 jobs per month' slogan is going to have to be canned forthwith, with annual employment growth down from a record high of 431,200 in January 2018 to 332,200 (or 2.73 per cent) by April. 

State versus state (NSW superboom)

Employment blazed another 27,600 higher in New South Wales to be up by 46,800 over the quarter, and a thunderous 156,000 year-on-year, casting further doubt on the endless gloomy house price predictions, with first homebuyers also now wading in. 

The New South Wales economy has added well over 300,000 extra jobs over the past three years, something achieved for the first time ever on a rolling 3-year basis in the past few months across more than 40 years of available figures. 

One of the extraordinary aspects of this cycle has been the sheer concentration of employment growth.

Of the suburbs where participation rates have been rising almost all of them are in the inner suburban heart the big capital cities, while more than half of jobs have been created within a tiny 2-kilometre radius of the Sydney and Melbourne CBDs.

Small wonder the competition for prime location land continues to intensify.

Queensland's jobs boom seems to have tapered back, with annual employment growth in trend terms now at 3.5 per cent, remaining comfortably in second place only to New South Wales at a supercharged 3.8 per cent. 

Interestingly the trend participation rate hit a record high 65.7 per cent in April driven by female and older workers entering the labour force, with the unemployment rate ticking up a notch to 5.6 per cent. 

Despite searing annual population growth of 123,100 and 147,400 in the two most populous states respectively, New South Wales has a trend unemployment rate of just 4.9 per cent while Victoria has seen its trend unemployment rate crunched lower to 5.3 per cent, down from 6.1 per cent a year earlier. 

Finally, and to finish on a positive note, the trend annual growth in monthly hours worked increased to 3.3 per cent, the highest level since all the way back in August 2010. 

The wrap

Overall, these figures would be construed as disappointing if you don't live in New South Wales, where the stamp duty/infrastructure boom is paying some serious dividends. 

Employment growth in recent times has been quite heavily focused in healthcare and construction, which might in part account for why wages growth has generally been tepid across most industries.

Underutilisation remains elevated, despite a modest improvement. 

Despite the uptick in the unemployment rate policymakers will most likely see enough positives here to stay on the sidelines for the foreseeable future. 

Insolvencies sneak marginally higher (mainly WA)

Bankruptcies moderate

A 45-second run through the latest AFSA figures on personal insolvencies and bankruptcies, for which there has been a slight break in the data series.

Firstly, on an annual basis bankruptcies continue to moderate (this is very much a lagging indicator). 

The only state in a meaningful uptrend here is Western Australia.

Insolvencies up in WA

Looking now at total personal insolvency activity, this has moved very marginally higher year-on-year.

The main state where total insolvency activity has been rising is Western Australia, while there was also a small increase in New South Wales. 

It's worth remember that Western Australia has been through a mining and demographic boom through the past decade-and-a-half, so when you look at insolvency activity per 1000 of population, insolvencies are not yet tracking at particularly high levels, in spite of the clear uptrend. 

Overall, a little bit of stress at the margin in evidence, but no more than that.

Wages growth undershoots (bonus time)

Wages soft, again

Wages growth came in at 0.5 per cent for the March quarter 2018, with the prior quarter also revised down to 0.5 per cent.

Year-on-year wages growth held at just 2.1 per cent.

Bonus time

And if you were looking for any positives from this release?

Well, including bonuses year-on-year growth was better at 2.63 per cent, which was the best result since all the way back in December 2014 (2.73 per cent). 

To some extent this may reflect what we've already seen reported in the average hourly earnings figures, which also reported the best result since December 2014. 

Although public sector wages growth has been reasonable at 2.35 per cent over the year, private sector wage price index growth remains remarkably weak at 1.92 per cent. 

Around the traps

Victoria and Tasmania recorded the strongest growth at 2.3 per cent, and the Northern Territory the weakest at only 1.1 per cent. 

Of course, Western Australia has come off the strongest wages growth since 1997 when the data series began, so the slowing in the resources states represents a natural rebalancing. 

At the industry level fastest growth was in healthcare and social assistance at 2.8 per cent excluding bonuses, and the weakest growth was in mining at 1.5 per cent. 

The wrap

Overall, despite a slight improvement in the wage price index following a brighter period for nominal GDP we've apparently reverted to wages growth meandering along. 

In Britain yesterday the unemployment rate was reported at the lowest level in four decades and the employment rate at the highest level - yet even there real wages growth is going nowhere. 

Yesterday the Reserve Bank of Australia reiterated its message about inflation getting back to target and wages growth improving in time. 

Doesn't look a whole lot like it from here, but the main positive from today's figures was that including bonuses wages growth hit a multi-year high. 

Finally, as for the wages growth forecasts in the Budget...just no. 

Vacancy rates a big tighter in several capital cities

Brighter in Brisbane for landlords

Brighter news for Brisbane landlords as the vacancy rate declined to 3 per cent from 3.7 per cent a year earlier, according to SQM Research figures reported yesterday. 

Asking rents for Brisbane units increased by +0.4 per cent in the month, too, mainly driven by the upper end of the market (renting good quality property in inner Brisbane still doesn't come cheap, despite the soft market overall). 

Brisbane appears to have a turned a corner as population growth picks up and dwelling commencements now decline sharply. 

The 6mMA figures attempt to capture the latest trends, but do incorporate the Christmas period, when vacancy rates tend to be high. 

Hobart appears to be through the worst for renters with vacancy rates rising slightly to 0.7 per cent.

Adelaide is building plenty of houses, but hasn't experienced the surge in investors seen in the larger cities, and accordingly vacancy rates keep tightening, now down to 1.3 per cent.

Melbourne was also tighter again on strong population growth at 1.3 per cent. 

Sydney's vacancy rates was flat at 2.3 per cent in the month, but plenty higher than a year earlier when it was 1.7 per cent, while Perth continues to turn the corner. 

7-year itch

Telstra dumped again

Telstra's (ASX: TLS) share price was dumped to a 7-year low at just $2.87 as investors lose the faith in management and the results being delivered. 

The company reported earnings would be at the bottom end of guidance.

Analysts now fear that the 22 cent dividend may not be sustainable.

Is the moment of maximum pessimism arriving?