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Friday, 19 April 2019

Jobs figures defy the gloom

Jobs figures defy gloom

A bit slow off the mark on this due to a long haul flight (made it back in one piece comfortably enough, though the airline opted to take a slightly more laissez faire approach to its baggage delivery services...hmm).

Anyway, there was still no real sign of a slowdown in the labour force figures up to March 2019, with full time employment posting a massive +48,200 increase for the month.

Total employment increased for an eighth month, rising by +25,700 in March. 

The headline numbers comfortably beat median market expectations to the extent that annual employment growth accelerated up to +304,700 or +2.44 per cent.

That's still a very strong rate of net jobs growth, and miles ahead of population growth (click to expand any of the graphs below):

Queensland led the way in March at +10,400 for total employment, followed by Victoria at +10,000.

Over the year the new employment was mostly created in New South Wales (+130,000), Victoria (+123,000), and Queensland (+38,000), while things seem to have picked up a little in South Australia (+15,000). 

Looking forward, job advertisements are now coming off record highs, but readings are now slowing as housing construction employment shrinks across the major capital cities.

Record participation

With more females coming into the labour force than ever before, the participation rate in Australia has never been higher, as more households move towards dual incomes. 

Accordingly the seasonally adjusted unemployment rate is slightly off its cycle lows, rising from 4.9 per cent to 5 per cent in March.

It was interesting - to me at least - to note that with the unemployment rate to a few decimal places coming in at 5.0475 per cent, just another dozen unemployed folks in the survey could've collectively tipped the reported unemployment rate up to 5.1 per cent (imagine ze headlines...). 

Stepping back from the monthly noise, muscular jobs growth and record participation is obviously a good result for the looming Federal Budget surplus and a good result for the economy, regardless of decimal point moves in the official rate of unemployment. 

For the record, the seasonally adjusted underutilisation rate was 13.2 per cent in March, somewhat lower than the 14 per cent seen a year earlier. 

In New South Wales the unemployment rate remained close to 40-year lows at only 4.3 per cent, while in Victoria the unemployment rate ticked down another notch to 4.6 per cent.

Queensland's recent unemployment figures have been a bit distorted by the Townsville floods, but - as the smoothed trend figures show below - away from Sydney and Melbourne unemployment has been tracking at closer to 6 per cent, representing plenty of slack.

Finally, after revisions the trend annual growth in total hours worked was notably better than previously reported, and increased a little further this month. 

Happy Easter RBA

Perhaps reflecting ongoing strength in export income and nominal GDP growth the economy continued to create jobs at a sprightly pace all the way through the first quarter of calendar year 2019. 

This will make for a brighter Easter break for the Reserve Bank, though many economists (and financial markets) still envisage a rate cut before the calendar year is out.

Next Wednesday's inflation data will form a key part of that equation, of course, with a soft print perhaps acting as a trigger for further easing.