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AUSTRALIA'S JOBS REPORT SMASHES EXPECTATIONS

Photo: iStock

Australia’s jobs report for March smashed expectations.

According to the ABS, employment increased by a massive 60,900 in seasonally adjusted terms, easily surpassing the 20,000 increase expected by economists.

February’s decline, previously reported as a drop of 6,400, was also revised higher to show an increase of 2,800.

The lift in employment was the largest since September 2015, and the sixth consecutive month with an increase.

The ABS said that an increase in employment was observed across the survey’s eight sample groups, including the incoming rotation group.

Total employment now stands at 12.06 million, the highest level on record.

From a year earlier, employment grew by 146,000, or 1.22%, the fastest percentage increase since September last year.

Over that period, full-time employment increased by 67,800, or 0.8%, marking the first time since August 2016 that it rose from a year earlier. Part-time employment grew by 78,100, or 2.1%, the slowest increase since March 2015.

Making the headline jobs figure all the more stronger, and perhaps stirring up renewed scepticism about the ABS’ seasonally adjusted data, it said that full-time employment surged by 74,500 over the month, offsetting a 13,600 drop in part-time workers.

Females accounted for the vast bulk of the lift in full-time employment recorded, soaring by 48,200. It was the largest increase since January 2009.

Male full-time employment rose by a smaller 26,300, marking the strongest monthly gain since October last year.

Female part-time employment fell by 12,800, while that among males dropped by a smaller 800 workers.

Fitting with the surge in hiring recorded, total monthly hours worked increased by 3.2 million hours to 1.66642 billion hours.

Despite the mammoth increase in employment, the unemployment rate held steady at 5.9% courtesy of a lift in labour market participation which rose to 64.8% from 64.6%.

The participation rate now stands at the highest level since July 2016, having recovered from a record-low level of 64.4% in late 2016.

With more Australians entering the labour market, the number of unemployed workers actually increased by 4,000 to 753,100.

The total size of the labour force — including those employed and unemployed persons actively looking for work — surged by 64,900 to 12.8127 million, the highest level on record.

There are currently 5.962 million females in Australia’s labour force, and 6.851 million males.

From a state and territory perspective, the strongest increase in employment was recorded in Queensland, New South Wales and Victoria at 28,800, 23,300 and 9,800 respectively.

South Australia, at 2,000, was the only state that registered a decline in employment.

All states recorded an increase in labour market participation.

In terms of unemployment, it fell in Queensland and New South Wales but rose in South Australia, Western Australia, Victoria, and Tasmania.

The ABS does not release seasonally adjusted unemployment rates for Australia’s territories.

Source: ABS

On the surface, there’s not much to dislike from the jobs report with employment increasing sharply led by a surge in full-time hiring.

And all states registered an increase in employment apart from South Australia, led by Australia’s eastern states.

And while the unemployment rate held steady at a more than one-year high of 5.9%, that was because labour market participation increased, signalling that conditions in the jobs market are encouraging more Australians to look for work.

Throw in a lift in total hours worked and it’s hard to disagree that it’s a strong report.

However, that just it.

It looks almost too strong, with employment suddenly surging out of the blue after several months of underwhelming growth.

While it would be nice to say that the labour market is as strong as the headline figures would suggest, even forward-looking labour market indicators such as job ads, PMI reports, and the NAB business survey — which are improving — haven’t strengthened that much.

However, as this final chart reveals, there are grounds from optimism to suggest that labour market conditions are improving.

In trend terms, the data series the ABS says provides the best measure of the underlying behaviour of the labour market, full-time employment increased by 15,600 in March, the strongest increase since October 2015.

It’s average 14,700 so far this year, a far cry from the same period in 2016 when full-time employment averaged a drop of 4,300 per month.

Coinciding with a deceleration in part-time employment growth over the past year, it points to a labour market that is strengthening.

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