Another solid monthly jobs report from the Australian Bureau of Statistics with significant gains in August in both the more accurate trend measure and on the more publicly used seasonally adjusted basis.
The ABS said yesterday the trend unemployment rate decreased from 5.4% to 5.3%, while the seasonally adjusted figure remained steady at 5.3% – both are the lowest jobless rates for years.
The news saw AMP Chief Economist, Shane Oliver comment:
“The strong labour market is clearly a source of strength for household incomes and if sustained points to stronger wages growth.
“However, still high labour market underutilisation points to the pick-up in wages growth being very gradual and it will be a while before its consistent with the midpoint of the RBA’s inflation target. As such we remain of the view that the RBA will leave interest rates on hold out to 2020 at least.”
Over the past year, trend employment increased by around 300,000 or 2.5%, which was above the average year-on-year growth over the past 20 years (2.0%), but down from the 3.3% rate at the start of this year when more than 394,000 new jobs were added on a trend basis.
ABS Chief Economist Bruce Hockman said that yesterday “since last August, the trend unemployment and underemployment rates have both fallen. As a result, underutilisation in Australia was at its lowest level since late 2013, at 13.6%.”
The ABS reported that trend employment increased by around 29,000 in August 2018 with full-time employment up by around 21,000 persons.
The trend participation rate remained steady at 65.6% in August 2018, after the July figure was revised up.
Compared to a year ago, the ABS said there were 183,500 more people employed full-time and 119,500 more employed part-time. This compositional shift led to an increase in the part-time share of employment over the past 12 months, from 31.5% to 31.7%.
“For those people aged 15 to 64 years, trend participation was the highest on record. Female participation in this age group, at 73.2 per cent, was also a record high,” Mr Hockman said.
On a trend basis, monthly hours worked increased by 0.1% in August 2018 and by 1.8% over the past year.
Seasonally adjusted the number of people employed increased by around 44,000 persons in August 2018. The seasonally adjusted unemployment rate was steady at 5.3%, the underemployment rate decreased to 8.1% and the underutilisation rate decreased to 13.4 per cent. The labour force participation rate increased to 65.7%, according to the ABS.
“The net movement of employed in both trend and seasonally adjusted terms was underpinned by well over 300,000 people entering employment, and more than 300,000 leaving employment in the month,” the Bureau noted.
“For most states and territories, year-on-year growth in trend employment was at or above their 20 year average, except for Western Australia, Tasmania and the Australian Capital Territory. Over the past year, the states and territories with the strongest annual growth in trend employment were New South Wales (3.6 per cent), the Northern Territory (3.0 per cent) and Victoria (2.5 per cent),” the Bureau said yesterday.
