Australia’s notoriously wild monthly jobs report will be unleashed upon markets later today.
After a small increase in January, economists expect employment growth to quicken in February, although not by enough to bring down the unemployment rate.
Adding extra spice to this release, the ABS will release quarterly underemployment figures, providing an update on the degree of labour market slack that exists within the economy at present.
As something that’s on the radar of the RBA given its implications for wage growth and inflationary pressures in the future, this means today’s report carries the potential to be even more market moving than usual.
Here’s the state of play.
- In January, employment rose by 13,500 in seasonally adjusted terms, beating expectations for a gain of 10,000. December’s increase, previously reported as a gain of 13,500, was revised higher to a rise of 16,300.
- However, it was entirely driven by higher part-time employment. It surged by 58,300, offsetting a sharp decline in full-time workers which tumbled by 44,800.
- Over the past 12 months, part-time employment grew by 159,400, or 4.3%. At the other end of the spectrum, full-time employment fell by 56,000, or 0.7%.
- By gender, female employment grew by 82,100, or 1.5%, over the same period. That far outpaced employment growth among males which rose by just 2,100, or 0.3%.
- The unemployment rate fell to 5.7% from 5.8%, largely due to a drop in labour market participation to 64.6% from 64.7%.
- The male unemployment rate fell to 5.5% — the lowest level since February 2013 — while female unemployment held steady at 5.8%.
- Helping to explain the drop in male unemployment, labour market participation among men fell to 70%, the lowest level on record.
- Despite the drop in full-time employment, the ABS said that total hours worked rose by 10.2 million hours to 1.6827 billion hours.
- Over the past year, hours worked increased by 1.2%. Full-time hours worked grew by 0.4%, outpaced by a 5.1% lift in part-time hours.
- Today, the median economist forecast offered to Bloomberg is centred around an increase in employment of 16,500. Individual forecasts range from a drop of 2,000 to an increase of 30,000, underlining just how wild the seasonally adjusted figures can be.
- The expected increase isn’t unreasonable given alternate labour market measures as ANZ job ads, NAB business survey and Westpac unemployment expectations have all improved in recent months.
- While there have been exceptions to the rule, the data has a tendency to reverse large movements from a month earlier — something to keep in mind given the split in part and full-time employment in January.
- Both the unemployment and participation rates are expected to remain steady at 5.7% and 64.6% respectively.
- The ABS will also release quarterly underemployment figures, capturing those who are working part-time but who would like to work more hours.
- When this was last released in the November 2016 jobs report, it stood at 8.3%, down 0.3 percentage points from the previous record high set in August.
- This figure, along with the split in full and part-time employment and changes in hours worked, will be used by markets to gauge the degree of labour market slack that exists at present.
The report will be released at 11.30am AEDT.
Business Insider will have all the details as soon as it hits the screens.