Australia’s April jobs report will be released later today.
After soaring last year, employment growth has slowed rapidly in early 2018, bucking the trend seen in most leading labour market indicators over the same period.
They suggest employment should still be growing at a decent clip, only it isn’t.
As such, Australia’s unemployment rate still remains at 5.5%, above the level where wage growth is expected to accelerate.
Given Australia’s weak March quarter wage price index (WPI) report released earlier this week, showing annual wage growth remained steady at 2.1% despite strong employment growth, there’ll be plenty of interest in today’s report, especially on whether there’s been any progress in reducing the amount of underutilised workers that exist within the labour market at present.
Here’s the state of play.
- In March, employment increased by 4,900 in seasonally adjusted terms, missing expectations for an increase of 20,000.
- Full-time employment fell by 19,900, masked by an increase in part-time employment of 24,800.
- Mirroring the small increase in employment, total hours worked increased by 4.5 million hours to 1.74 million hours. This followed an increase of 22 million hours in February.
- Trend employment growth, eliminating much of the monthly volatility in the seasonally adjusted figures, slowed to 14,000, well below the 40,000 plus level seen less than a year ago. This demonstrates the slowdown in employment seen in recent months.
- Over the year, full-time employment increased by 226,900 in seasonally adjusted terms, outpacing a 140,200 lift in part-time workers. Combined, total employment rose by a still-brisk 367,100.
- Despite the soft monthly result, the unemployment rate held steady at 5.5%, in line with market expectations. The lack of movement was due to a dip in labour force participation which fell from 65.6% to 65.5%.
- The size of Australia’s labour force — measuring the number of Australians in employment or who are actively seeking work — rose by 2,500 to 12.221 million.
- With employment increasing by 4,900 over the same period, that saw the total number of unemployed Australians fall by 2,400 to 730,200.
- In April, economists expect employment growth to improve.
- Of the 23 polled by Bloomberg, the median forecast looks for an increase of 20,000. Individual forecasts range from an increase of between 10,000 to 30,000. No one expects employment to decline.
- With participation expected to hold at 65.5%, unemployment is tipped to remain at 5.5%.
- With no underemployment or underutilisation figures contained in today’s report, markets will look to the split between full and part-time employment, total hours worked, along the unemployment rate, to gauge whether labour market conditions tightened or loosened during the month.
- In a speech delivered earlier this week, RBA Deputy Governor Guy Debelle said the unemployment rate is “the most useful single statistic to assess the state of the labour market”.
- That provides a clear-cut answer as to what’s likely to drive movements in financial markets following the release.
The jobs report will be released at 11.30am AEST.
Business Insider will have all of the facts and figures, along with the implications, as soon as it hits the screens.