The Australian economy has recorded another month of employment gains and the unemployment rate has fallen to 5.4%. However, the increase was less than expected and previous months were revised down in net terms.
The ABS has released employment estimates for May which indicate the total number of people employed in Australia in either full-time or part-time work increased by 12,000. Market expectations prior to the report’s release were for 19,000 new positions to be created. March’s employment growth number was revised up from -700 to +2,100 while employment growth during April was revised down from +22,600 to +18,400.
Local 3-year and 10-year bond yields had started the day lower despite higher yields in US markets. They kept heading lower through the day and the employment figures appeared to make little difference. 3-year bond yields finished 4bps lower at 2.18% and 10-year bond yields fell by 5bps to 2.73%. The AUD started the day considerably lower against the greenback and then finished around 1 US cent lower at 74.80 US cents.
ANZ economist Jack Chambers said on the figures were good on the surface. However, there were parts which gave the impression any progress in lowering unemployment would be slow. “Total employment rose a less-than-expected 12,000 and April’s increase was revised down a touch. Total hours worked decreased in May as full-time employment decreased by 20,600. Consistent with this was a 0.1% rise in the under-employment rate in the three months to May to 8.5%…improvements in wage growth will also be gradual.”