Australia’s April jobs report will be released on Thursday.
Given the Reserve Bank of Australia (RBA) believes that only a further improvement in labour market conditions will likely be enough to bring underlying inflation back to the bottom of its 2-3% target range, this report is now the most important data release in Australia when it comes the outlook for official interest rate settings, superseding readings on inflation and economic growth.
With financial markets fully priced for the RBA to slash Australia’s cash rate to 1% by early next year, down from 1.5% at present, only a bumper jobs report will be enough to keep speculation over a near-term rate cut off the table.
Here’s the state of play.
- In March, employment grew by 25,700. Full time employment surged by 48,300, more than offsetting a 22,600 decline in part time workers.
- Over the year, full time employment grew by 289,800, substantially faster than the 14,900 lift in part time employment. Combined, total employment rose by 304,700, or 2.44%.
- Despite the hiring surge, the national unemployment rate rose to 5.0%, up 0.1 percentage points from February.
- Australia’s labour force increased by 42,800 people, more than the 25,700 increase in jobs created. That saw the total number of unemployed Australians increase by 17,100 to 680,000, explaining the lift in the unemployment rate.
- Labour force underemployment — measuring the proportion of the workforce that have a job but would like to work more hours — rose 0.1 percentage point to 8.2%. Combined with the increase in unemployment, labour market underutilisation rose by an even larger 0.2 percentage points to 13.2%.
- Underutilisation, rather than unemployment, has a better inverse relationship to changes in Australian wage growth.
- In today’s report, the median economist forecast offered to Bloomberg looks for a lift in employment of 15,000. Individual forecasts range from an increase of 1,000 to as much as 29,000.
- Labour force participation is expected to remain steady at 65.7%. That’s the proportion of the working age population either with a job or who are actively seeking work.
- With a modest increase in hiring expected and participation tipped to hold steady, unemployment is seen holding at 5%.
- The unemployment figure will drive movements in financial markets in the immediate aftermath of the release. With wage and inflationary pressures very weak, the underutilisation rate may also prove to be more influential than usual.The split between full and part time employment, and hourly wages worked, will take a backseat on this occasion.
The jobs report will arrive at 11.30am AEST.
Business Insider Australia will have all the figures and implications as soon as it’s released.
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