The labour force release will dominate the Australian data calendar next week with the highlights being the estimates of spare capacity in the labour market. The key points will be the rate of unemployment (currently stuck around 5.5 to 5.75%), the underemployment rate (currently around 8.5 to 9 per cent) and, linked to those, the momentum in jobs growth in both full-time and part-time work.
In recent months, the labour force data has seen solid levels of growth in employment which is good news. Less good has been the fact that this job growth is only, more or less, matching population growth. As a result, the unemployment/underemployment rates are not falling by much, if at all and this, rather than the level of employment, is why wages growth remains at record lows. The labour market needs at least a year or two of stronger growth before we can be confident that wages growth will pick up.
