Australian employment data for March is out this morning and the market is tipping an increase of 15,000 jobs for the month. That means that the unemployment rate will stay steady at 6.3%.
Much focus recently has been on the rise in unemployment to 12-year highs. But NAB chief markets economist Ivan Colhoun says that more attention needs to be paid to employment rather than unemployment.
“Australia currently has a record level of employment, with some 11.7 million persons employed, 151,000 higher than in February 2014,” Colhoun says.
That’s important for the economy because this current rise in unemployment is very different from historic periods where unemployment has risen or unemployment increases we have seen in Europe and other nations since the GFC.
“In Australia, employment growth has remained positive in recent years, meaning the rise in unemployment reflects Australia not producing sufficient jobs to accommodate newly-arrived migrants and school and university leavers. This type of unemployment, while certainly a policy and potential social issue, is not as damaging for the economy,” Colhoun says.
That’s a very different take to the conventional wisdom pervading markets at the moment.
We’ll have full coverage of the employment data at 11.30am today.