Australia’s December jobs report has beaten expectations yet again.
According to the Australian Bureau of Statistics (ABS), employment rose by 34,700 in seasonally adjusted terms, topping forecasts for an increase of 15,000.
Employment has now increased in each of the past 15 months, equalling the longest consecutive streak on record. One more positive month in January, should it occur, will mark the longest streak since the survey began in 1978.
Over the month, full-time employment increased 15,100 to 8,518,900, outpaced by a 19,500 increase in part-time employment which rose to 3,921,800.
After seasonal adjustments, the ABS said the largest increase in employment was in New South Wales at 14,300, followed by Western Australia at 6,100.
Victoria, at 3,900, experienced the largest decline in employment of any state during the month.
While employment levels increased, the ABS reported that the total amount of hours worked fell by 4.2 million hours, or 0.2%, to 1.7364 billion hours in seasonal terms.
More jobs were created, we just worked a little less.
Total hours worked previously increased by 9.8 million hours in November.
Over the year, total employment surged by 403,100, equating to an average increase of 33,600 each and every month. It was the fastest growth over a calendar year on record, and the second fastest over any 12-month period, only surpassed by a 409,300 increase in August 2005.
Full-time employment growth drove the headline increase, jumping by 303,400 over the year. In comparison, part-time employment increased by a smaller 99,700 workers.
Despite the solid lift in employment in December, the unemployment rate rose to 5.5% thanks to another surge in labour market participation, which jumped 0.2 percentage points to 65.7%.
Labour force participation — Australians of working age either in or looking for work — now stands at the highest level since January 2011.
Essentially, the reason unemployment rose was because more people were looking for work, likely encouraged by recent strength in labour market data.
With the size of Australia’s labour market increasing faster than employment, the total number of unemployed Australians rose by 20,500 to 730,600.
The unemployment rate had been expected to hold steady at 5.4%.
By state and territory, unemployment increased in Victoria, Queensland and Tasmania, offsetting declines in New South Wales, Western Australia and South Australia.
With employment growing so rapidly over the year, the employment to population ratio — a measure of those Australians of working age currently in employment — increased 62.0% in seasonally adjusted terms, up a full percentage point from one year ago.
After such a strong year of employment growth in 2017, Paul Dales, Chief Australia and New Zealand Economist at Capital Economics, says recent leading indicators point to the likelihood that it will slow a little in the year ahead.
“Jobs growth will probably come off the boil a bit,” he said following the release of the report.
And with stronger labour market conditions encouraging more people to either enter or look for work, he isn’t expecting a meaningful lift in wage pressures this year.
“The labour market will drive a modest rebound in real income growth this year, but more needs to be achieved before wage growth rises meaningfully,” he says.
Callam Pickering, APAC Economist at Indeed, agrees with Dales’ assessment.
“Although this was another excellent jobs report, there is still much progress to be made,” he says.
“Labour market slack remains elevated, which helps to explain the ongoing weakness in wage growth and the cautiousness of Australian households.
“We believe that there is reason to be optimistic on wages, particularly now that businesses are cashed up and some report a greater difficulty in finding new staff, but improvement could be slow.”
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