Australia’s jobs report for May is about to be released.
After a stellar 2017, Australia’s labour market has come off the boil this year. Jobs growth has slowed and unemployment has risen, moving further away from the level where wage pressures are expected to build.
Economists expect little improvement on the unemployment front today, even with a modest increase in employment.
Adding extra clout to today’s report, it will also contain quarterly underemployment data, measuring the number of Australians who have a job but who would like to work more hours. Combined with unemployment, this will produce Australia’s underutilisation rate, a figure many regard as being the best measure of labour market slack within the Australian economy.
It remains at elevated levels, undoubtedly contributing to the weak wage outcomes seen in recent years.
Given the importance of wage growth in determining the outlook for household spending, inflation and official interest rates, this figure could be just as influential on Australian financial markets as the unemployment rate today.
Here’s the state of play.
- In April, employment grew by 22,600. Full-time employment increased by 32,660 while part-time employment fell by 10,020.
- Reflecting the lift in full-time workers, total hours worked increased by 19.4 million hours, or 1.11%, to 1.764 billion hours.
- Despite the solid increase in employment, the unemployment rate rose to 5.6% from 5.5%. It had been as low as 5.4% at the end of last year.
- Total unemployment increased by 10,600 to 741,000, the highest level since March 2017.
- Over the year, full-time employment rose by 265,200, outpacing a 66,900 increase in part-time workers. Combined, total employment increased by 332,100 to 12.5 million, the highest level on record.
- Even with a 332,100 increase in employment over the year, Australia’s labour force — measuring those either in employment or actively seeking work — grew by an even larger 341,900 over the same period, seeing the number of unemployed workers increase by 9,700 from a year earlier.
- Australia’s labour force participation rate — the proportion of working-age Australians in the workforce — rose by 0.1 percentage points to 65.6%, moving back towards the multi-year high of 65.7% seen earlier in the year.
- Continued growth in participation reflects not only that robust job market conditions are encouraging people not previously in the labour force to look for work, but also strong population growth and more Australians working well past retirement age.
- The employment-to-population ratio — measuring the proportion of Australia’s working age population in employment — held steady at 61.9%.
- Today, economists expect another modest increase in employment, although it’s not expected to be enough to lower unemployment.
- Of the 22 polled by Bloomberg, the median forecast looks for an increase of 19,000. Individual forecasts range from a gain of anywhere between 8,000 to 32,000.
- With participation expected to hold at 65.6%, unemployment is tipped to remain at 5.6%, above the 5% level where many estimate that wage pressures will begin to build.
- Providing extra information on the outlook for wage pressures, the ABS will also release quarterly underemployment and underutilisation figures in today’s report.
- When last released in February, underemployment stood at 8.4%, up from 8.3% in November 2017. Combined with unemployment, labour force underutilisation was reported at 13.9%, still elevated compared to the levels seen before the global financial crisis.
The jobs report will be released at 11.30am AEST.
Business Insider will have all of the details as soon as it hits the screens.