The bloom is fading from the Australian jobs market as the Reserve Bank has been suspected, before this month’s surprise rate cut.
Bureau of Statistics figures for April released yesterday revealed another weakish month for jobs with the solid growth seen in late 2015 continuing to fade, especially with full time employment falling and all the growth happening in part time work – a sure sign of employers struggling to keep up employment levels.
Coming a day after the wage index for the March quarter showed another fall in wages growth to a new record low, the impetus from slower wages is slowly disappearing. All up the news from the two reports keeps live the possibility of another rate cut from the Reserve Bank, even if the seasonally adjusted jobless rate remained steady on 5.7%.
Certainly the Aussie dollar took the possibility of another cut from the news and eased closer to 72 US cents.
The ABS said that on the more accurate trend basis, employment increased by around 228,900 persons (an annual growth rate of 2%). This is down from the annual employment growth of 295,000 persons (2.6%) at December 2015. The annual trend growth rate in March was 2.2%, so the slowdown in April was noticeable.
The Bureau said that over the past month, trend employment increased by 4,100 persons to 11,910,800 persons – a monthly growth rate of 0.03%. This monthly growth rate was below the monthly average over the past 20 years of 0.15%, and down from the recent peak of 0.26% in October of last year.
"The trend in part-time employment growth continued from March into April, with the 10,500 increase in part-time employment being the eleventh consecutive monthly increase of more than 10,000 persons. In contrast, trend full-time employment decreased by 6,400 persons, its third consecutive monthly decrease,” General Manager of ABS’ Macroeconomic Statistics Division, Bruce Hockman said in yesterday’s release.
"This is reflected in the trend monthly hours worked in all jobs series, which decreased by 5.6 million hours (0.3 per cent) to 1,628.9 million hours. This was the fourth consecutive decrease in hours worked in all jobs, which reflects a combined decrease of 16.2 million hours (1.0%) from the high point at December 2015.”
The trend unemployment rate decreased slightly, down to 5.7%. The participation rate also decreased slightly, though it remained at 64.9% in rounded terms, according to the Bureau.
The more volatile seasonally adjusted figures saw the number of people employed rise 10,800 in April 2016, while the seasonally adjusted unemployment rate for April 2016 remained unchanged at 5.7% and the seasonally adjusted labour force participation rate fell by less than 0.1 percentage points to 64.8%.
The Bureau said seasonally adjusted full-time employment fell 9,300 to 8.165 million, while part-time employment rose 20,200 to 3.751 million. The number of people unemployed increased 400 to 723,300, the number of people looking for full-time work remained steady at 515,000 and the number of unemployed persons looking for part-time work increased 400 to 208,200.
While March quarter wages growth in Australia fell to yet another record low, there was actually a rise in real wages for the second quarter in a row. But it wasn’t much and came about because of falling prices, rather than rising wages.
The Bureau of Statistics figures released showed growth of just 0.4% quarter on quarter or 2.1% year on year. This was less than expected and took annual wages growth for the wage price index to yet another new recorded low. Private sector wages growth was just 1.9% year on year in the quarter, while public sector wages grew at a much faster rate of 2.5%.
Bureau of Statistics data shows that the March quarter consumer price index reported an 0.2% dip in headline inflation in the quarter, which dragged the annual rate to just 1.3%. The core reading favoured by the Reserve Bank showed an annual rate of 1.55% for the quarter, well under its 2% to 3% target range.
It is the second quarter in a row that inflation has fallen fast enough to allow weaker wage to produce real wage growth for private and public employees. In the three months to December, the wage price index rose 0.4% and 2.2% for the year, while headline CPI was up 0.4% and 1.7% (and the RBA’s preferred measures rose by just over 2%).
