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CEO AllenWargent Property Buyers, & WargentAdvisory (institutional). 6 x finance author.

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Thursday, 14 January 2016

"Strong trend growth" continues for employment

Employment revised up

Another jolly good result for employment in December, as the Labour Force figures showed the unemployment rate declining again in seasonally adjusted terms to a 26 month low.

After back-to-back strong employment results, including a huge gain of +71,400 jobs in November, the market was braced for a reversion, but in the event the November jobs gain was revised up to an even more monstrous +75,000.

In turn the essentially flat result for December, with employment declining by just 966, was once again a very much positive result, leaving total employment above 11.9 million. 

In monthly trend terms total employment increased by a further +27,500 in December. 

Better still, the monthly result saw a favourable shift between full time (+17,600) and part time (-18,500) employment. 

Folk never tire of reminding us that the monthly data is volatile, which is true!

Yet in less volatile trend terms total employment increased by a very strong +312,200 or +2.7 per cent over 2015, around double the rate of population growth and an excellent result.

186,600 of those new jobs were full time positions, while the employment to population ratio rose from 60.6 per cent to 61.4 per cent over the year. 

State versus state

Over the past year New South Wales (+168,800) has led the way with huge employment growth.

It was doubly good to see Queensland stepping up into second place adding a very solid +56,600 jobs in 2015, with Brisbane's labour market looking in particualrly good shape.

After some tentatively positive signs things seem to have taken a turn for the gloomier in Tasmania, with employment declining by -4,100 over the calendar year.

Indeed total employment in both of the southern states of South Australia and Tasmania is negative over the past four years, despite some recent hopeful signs.

Unemployment rate

In seasonally adjusted terms the unemployment rate declined again to 5.76 per cent, the best result since October 2013 and well down from 6.36 per cent at the beginning of the year. 

Looking at the state level unemployment rates in trend terms, unfortunately Tasmania (+6.6 per cent) and the Australian Capital Territory (+5.2 per cent) now look to be shaping higher again. 

In New South Wales the unemployment rate has trended down to just 5.2 per cent, while Queensland has been by far the best performer on this metric with the unemployment rate trending down from 6.6 per cent to just 5.9 per cent over the year.

The wrap

In context this was another upbeat result, with the latest jobs vacancies figures suggesting that more solid employment gains lie ahead in the first half of 2016. 

With employment growing at an astonishing +4.6 per cent in 2015 New South Wales now has the highest jobs vacancies figure in Australian history, with ANZ's Warren Hogan noting that the state has "one of the strongest economies in the world right now", and a massive infrastructure boom underway.