ANZ has released research showing the Reserve Bank policy of keeping interest rates at generational lows of 2.5% is creating employment as the mining boom dies down.
The bank’s economist Ivan Colhoun notes in the report that after some signifcant weakness: “Labour demand and employment have begun to strengthen in a number of key industries”.
In particular: conditions have improved in retail, construction, health, and education related services – industries that employ almost half of Australia’s workers.
This is unequivocally good news. More encouraging still, Colhon says:
“Along with the recent strengthening in retail sales growth and building approvals, these data suggest that the rotation of activity and employment – away from mining and towards other sectors – is underway. This is consistent with our view that we are at the low for the cash rate this cycle: overall business and labour conditions in the interest-rate parts of the economy are strengthening which is what can be expected from easy monetary policy.”
Notwithstanding the statistical anomalies associated with the recent employment report in Australia the strengthening seen in February might not be as isolated as some believe it was.