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Thursday 20 January 2022

Unemployment rate fell to 4.2pc (before Omicron)

Employment breaches new highs

Employment increased +64,800 in December, to 13.24 million, pushing total employment to above 2019 levels. 

The survey period was only until December 11, however, so this statistical release doesn't capture the potentially deleterious impacts of Omicron (i.e. the reported numbers for January could be poor). 

The employment surge in the December quarter was largely related to New South Wales adding back +230,000 jobs upon reopening, and Victoria added back +114,000 jobs, on a net basis. 

There isn't much doing elsewhere now. 

The participation rate missed expectations, staying pat at 66.1 per cent, and a little below where it was in the middle of last year.

The net result spat out an unemployment rate of just 4.2 per cent, which is the lowest unemployment rate since 2008, and spare capacity in the labour force declined. 

Hours worked in December were a solid (if unspectacular) +3.7 per cent higher than a year earlier, partly one assumes due to nurses and healthcare staff working long hours right now. 

The wrap

Overall, this was a pretty strong result for December, which has gotten a few commentators rather excited about surging wages, inflation, and of course monetary tightening.

Bill Evans of Westpac thinks the Reserve Bank could hike as soon as August this year, but let's see - it's kind of hard to assess when the city is half shut.  

The next inflation data is due out in only five days from now, and will of course be watched closely by analysts. 

Wages growth at the last count was only 2.2 per cent, and inflation has been tracking below target for so long that it seems odd to me that folks are getting quite so excited about a possible spike in inflation, but here we are. 


For reference:


There's been some strange debate over the past few days on social media about weather hospitalisations have peaked in New South Wales, are about to peak imminently, or would for some reason continue to rise in linear fashion.

Given the decline in growth rates - not to mention the unmissable behavioural change visible around the city - it was surely the former.

Whatever, today's numbers were very pleasing for NSW. 

ICU numbers may also be on the way down already in Victoria.

5.8 million boosters and counting should hopefully keep a lid on serious cases from here, mutations notwithstanding. 

Australia has now delivered well over 47 million vaccination doses...and counting.