Defying gravity (for now)
Employment continued to defy gravity in increasing by +34,700 in August, although the composition was was all part-time this month, and full-time employment fell.
Over the year to August employment increased by +310,700 to keep the annual pace of growth at a sprightly +2.46 per cent (a rate of increase still well ahead of population growth).
The jobs over the past few months have mostly been seen in New South Wales and Victoria (still), although hearteningly Western Australia has now recorded several solid months on the bounce.
Employment in the Northern Territory, by way of contrast, has fallen by nearly 7 per cent from its peak.
Participation in the labour force continues to skyrocket, now up to a fresh high of 66.2 per cent - once again driven by New South Wales and Victoria - and as such spare capacity is as high as it ever was.
With another modest increase to 5.254 per cent, the monthly unemployment rate was rounded up to 5.3 per cent.
The unemployment rate is now at the highest level since July/August 2018 and seemingly destined to drift ever further away from NAIRU.
On the plus side, in New South Wales the unemployment rate ticked down to 4.3 per cent, and Western Australia's seasonally adjusted unemployment rate has been under 6 per cent for three months in a row now.
On the other hand, unemployment rates are far too high in Queensland (6.4 per cent), Tasmania (6.6 per cent), and South Australia (6.8 per cent), all running at well above 6 per cent.
The smoothed trend state unemployment rates are plotted below, showing the dichotomy:
The smoothed trend state unemployment rates are plotted below, showing the dichotomy:
Note that this means employees are working fewer hours, on average.
The wrap
Summarily, still lots of part-time jobs are being created, but the leading indicators include job advertisements falling at dire double-digit rates, and a construction-related crunch heading squarely for Sydney and Melbourne.
Measures of underemployment increased again, and under-utilisation (13.8 per cent) remains very much elevated (and almost off the charts for younger workers at around 30 per cent), and so wages growth remains slow.
It's good that more people are in work, and the Federal budget is now back in balance.
But there remains a ton of spare capacity, inflation expectations continue to sink, and economists are lining up to call for an interest rate cut in October (markets are pricing 25 basis points in October as close to a lock, at about 80 per cent).
But there remains a ton of spare capacity, inflation expectations continue to sink, and economists are lining up to call for an interest rate cut in October (markets are pricing 25 basis points in October as close to a lock, at about 80 per cent).
Of course, jobs reports are always 'mixed', but recent releases really have been mixed!
The two most populous states have recorded strong employment growth and conditions, but with participation so high objectively we're now a long way from full employment, and - with construction job advertisements cratering - likely heading further adrift.
The two most populous states have recorded strong employment growth and conditions, but with participation so high objectively we're now a long way from full employment, and - with construction job advertisements cratering - likely heading further adrift.
