Australia’s labour market continues to deliver the goods.
According to the Australian Bureau of Statistics (ABS), employment rose by 27,900 in seasonally adjusted terms in July, topping expectations for an increase of 20,000.
It left total employment at 12,201,400, the highest level on record.
June’s employment gain of 14,000 was revised up to show an increase of 20,000.
At ten, the current stretch of uninterrupted monthly employment gains is now the longest since early 2011.
As opposed to the trend seen in recent months, it was part-time employment that drove the increase in July.
It increased by 48,200, offsetting a 20,300 decline in full-time workers.
In a result that will no doubt raise a few questions about the veracity of its seasonally adjusted figures, the ABS said that employment in Queensland alone surged by 27,000.
Over the year, and despite the fall in July, full-time employment jumped by 197,700, outpacing a 41,600 increase in part-time workers.
The annual gain in full-time employment was the largest increase since November 2015. On the other hand, annual growth in part-time employment was the smallest since October 2014.
Combined, total employment over the year rose by 239,300. Of that, 189,000 came in over the past five months, marking the strongest period of hiring since January 2005.
Reflective of the drop in full-time employment in July, the ABS said that total hours worked fell by 14.4 million hours to 1.69 billion hours.
The national unemployment rate fell to 5.6%, a result that came despite a lift in labour force participation to 65.1%. The participation rate now stands at the highest level since January 2016.
The participation measures the proportion of the population of working age who are currently in employment or actively seeking work.
June’s unemployment figure, previously reported at 5.6%, was revised up to 5.7%.
By state and territory, unemployment increased in Tasmania, Victoria, New South Wales, while it declined in South Australia, Western Australia and Queensland.
With more Australians entering the labour force, the number of unemployed workers edged up to 730,600, an increase of 1,100.
From a year earlier total unemployment was almost unchanged, reflecting an increase in labour force participation over the same period.
Despite the strong lift in headline employment in July, the composition of the growth, along with the decline in hours worked and static unemployment rate (the fall was due to rounding), indicates that there’s still ample slack that exists within the Australian labour market at present, a factor that looks set to keep growth in wage pressures in check for some time yet.
“With the unemployment rate remaining at 5.6% and measures of underemployment still elevated, there is still a high degree of slack across the labour market,” said Callam Pickering, APAC economist at Indeed. “This is helping to contain wage growth and indicates that the economy still has some way to go before the Reserve Bank should contemplate tighter monetary policy.”
And after a solid run of hiring in recent months, Pickering says that employment conditions are likely to cool somewhat in the period ahead.
“The pace of employment growth is likely to moderate over the remainder of the year, towards more sustainable levels, as the labour market deals with a number of challenges,” he said
The Australian dollar has given back some of its earlier session gains, and bonds futures are a tad stronger, reflecting the underlying themes seen within the July report.