The continuing sluggishness in the labour market was underlined once again in the October employment report from the Australian Bureau of Statistics. Trend jobs growth slowed for the first time in three years as the heat continues to go out of employment growth. That’s despite a small rise in the number of seasonally adjusted jobs last month. This weak trend performance helps explain the slide in wages growth.
The seasonally adjusted figures showed some growth (9,800 new jobs) in November, with the unemployment rate steady at 5.6% and the participation rate also steady at 64.4%.
But that disguised a reversal of September’s big rise in part time jobs. The October report showed full-time employment rose 41,500 to 8.126 million and part-time employment fell 31,700 to 3.812 million all but reversing September’s 53,300 fall in full-time employment to 8,105 million and 43,200 rise in part-time employment to 3,84 million.
The more accurate trend basis for reporting the figures (which is designed to smooth out the month to month volatility of the seasonally adjusted series) showed the true state of the jobs market. The ABS reported that for the first time since November 2013 – trend employment fell in October. It was only a drop of 1,000, to 11.946 million, but it was a fall and shows us the extent of the slow down in momentum in the jobs market.
The ABS said the “slight fall in trend employment reflected an increase in part-time employment of 8,400 persons being more than offset by a decrease in full-time employment of 9,500 persons."
"Since December 2015 we have seen a continued decline in trend full-time employment and an increase in part-time employment, with a corresponding increase in the share of hours worked by part-time workers. This shift to part-time employment has been more pronounced for males compared to females," said the Program Manager of ABS’ Labour and Income Branch, Jacqui Jones.
"Over the past year, part-time employment has increased from around 31 per cent of employment to 32 per cent. That’s a relatively large shift, if you consider that it was around 29 per cent 10 years ago. Since December 2015, there are now around 132,700 more persons working part-time, compared with a 69,900 decrease in those working full-time," said Ms Jones.
The trend monthly hours worked increased by 3.2 million hours (0.2 per cent), with increases in total hours worked by both full-time and part-time workers. The trend unemployment rate remained steady at 5.6 per cent. The participation rate decreased by 0.1 percentage points to 64.5%. Participation has decreased by 0.6 percentage points over the past year, according to the ABS.
This slowing momentum in the jobs market is having an impact on wages growth. The two are hand in hand at the moment, especially the growth in part time work. The data from the ABS on Wednesday.
Seeing the Consumer Price Index rose an annual 1.3% in the year to June, wages growth is still real, but inflation is starting to rise and could easily overtake wages growth in the next year to again push employee incomes lower in real terms.
Compounding the problem there were some significant revisions of data from the past year. Wednesday’s report reveals changes to the December and June quarter data: annual growth in the December 2015 quarter was originally 2.2%, but now it’s been revised down to 2.0%; in the June quarter, it was originally 2.0%, now revised down to 1.9%, the same as in the September quarter.
