Australia’s February jobs report has missed expectations, with unemployment shooting higher as employment growth fell.
According to the ABS, employment fell by 6,400 in seasonally adjusted terms, missing the median economist forecast that was looking for an increase of 16,500.
It was the first decline in employment since September 2016, and left total employment at 11.999 million.
Cushioning some of the blow from the drop in total employment, the ABS said that full time employment grew by 27,100, partially reversing the 44,100 drop recorded in January.
Part time employment fell by 33,500, again reversing much of the increase registered a month earlier.
Over the past year, full-time employment decreased by 23,200 in seasonally adjusted terms. Over the same period, part-time employment rose by 127,800.
Total employment increased by 104,600, or 0.88%. Annual employment growth has now been running below 1% for the past five months.
By gender, male employment increased by 51,200, or 0.8%, over the past 12 months. That was slightly outpaced by employment growth among females which increased by 53,400, or 1%.
With total employment declining, and with labour market participation holding steady at 64.6%, the unemployment rate jumped to 5.9%, up from 5.7% in January.
That was the highest level since January 2016, with 748,100 currently out of work.
Male unemployment rose to 5.8%, a sharp increase on the 5.5% level of January, while female unemployment ticked up to 6.0%, the highest level since June 2016.
Youth unemployment — those aged 15 to 24 years — jumped to 13.3% in seasonally adjusted terms, a full percentage point higher than the level reported in January. Male youth unemployment stands at 14.5%, well above the 11.8% level for females.
Male participation bounced to 70.3%, up 0.3 percentage points on the record-low level of January. Female participation went the other direction, dropping to a six-month low of 59%.
By state and territory, all saw unemployment increase in seasonally adjusted terms aside from Western Australia where it fell from 6.4% to 6.0%.
This table from the ABS shows how each individual state and territory performed. The ABS does not release seasonally adjusted figures for Australia’s territories.
Mirroring the rise in the unemployment rate, the quarterly underemployment rate — measuring those employed who would like to work more hours, jumped by 0.4 percentage points to 8.7%, the equal-highest level on record.
Among females, it rose to 10.8% from 10.4%, leaving it at the equal highest level on record, while among males it increased from 6.7% to 6.8%.
That will come as a disappointment to the Reserve Bank of Australia given it indicates that there is currently still substantial slack that exists within the labour market.
Compounding the lift the underemployment rate, total hours worked decreased by 20.5 million hours to 1.6619 billion hours.
The ABS said the bulk of the decline came from full-time workers at 19.0 million hours, significantly higher than that for part-time workers at 1.5 million hours.
All up the February report was a disappointment, even with the rebound in full time employment that only partially corrected the large decline in January.
Unemployment rose to the highest level since January last year, underemployment hit a record high, total hours worked fell as did total employment.
Hardly a stellar report card, and one that casts renewed doubt on the strength of the labour market right now. It also has dented expectations that the RBA may be contemplating a rate hike later this year or in early 2018.
Financial markets reflect this with the Australian dollar giving back some of its overnight gains while Australian government bond futures, and stocks, have added to their earlier gains.
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