The Australian economy has just recorded its tenth month of employment gains. The ABS has released employment estimates which indicated the total number of people employed in Australia in either full-time or part-time work increased by 27,900 during the month, more than the generally-expected figure of 20,000. Consequently, the unemployment rate fell from a revised June figure of 5.7% to 5.6% at the end of July (although in a technical sense the difference arose from rounding and it was basically unchanged at 5.65%).
The total number of work hours across the whole economy fell by 0.8% when compared to June as 48,200 more part-time jobs were created and 20,300 full-time jobs disappeared. However, on a 12 month basis the figures were more encouraging; aggregate hours worked grew by 1.9% as 155,800 full-time and 113,000 part-time positions were created.
On the surface of things, the unemployment rate has been stuck around 5.6% since October 2016. However, in this period, more people have been encouraged to return to the workforce and the participation rate has increased from 64.4% at the end of October 2016 to its current figure of 65.1%.
On the day bond yields fell and the local currency was weaker against the U.S. dollar. Three year bond yields slipped from 1.98% to 1.97% and 10 year bond yields dropped 2bps to 2.64%.
Here’s what a few economists thought of the figures:
Felicity Emmett, ANZ
Some of the detail was a bit softer than the headline: full-time jobs fell, hours worked were down and the jobs gains were narrowly based. But we wouldn’t overplay these details. The labour market is clearly improving and additional job gains look likely in the near term. Further out, we continue to think that ongoing inroads into the unemployment rate will be more difficult to achieve, in part because the strong pace of public sector employment gains is unlikely to be sustainable.
Josh Williamson, Citi
Coming on the back of the soft 0.4% private sector wages growth data for Q2, the July labour force data do not suggest that wages growth will pick-up in Q3 outside some influence from the stronger-than-expected regulated increase in minimum wages. Furthermore, the strong employment gains in recent months have been unable to lower the unemployment rate from an average of 5.6% and annual growth in both employment and the labour force look like they have peaked.