Labour force is Australia’s most important data point at the moment because employment, if it comes through, is the natural antidote for the crash in consumer sentiment we have seen in Australia since the federal budget.
So today’s data was exactly what the economy needed.
The rise of 15,900 in employment was solid and, even though there was a fall in full-time employment with all the rise coming in part-time employment, the underlying picture this data paints is a good one for the economy regardless of the rise in the unemployment rate to 6%.
Here are the three key takeaways from today’s data
- Total Australians in the workforce hit a record high of 11,578,214 people. That’s good news because more people in the workforce means more Australians taking home pay packets and more income going into Australian households.
This is also important because in Westpac’s consumer sentiment survey released yesterday one of the concerns was the level of consumer pessimism over jobs.
- Aggregate Hours worked hit a new high which is also good news for household incomes
- Total unemployed people increased by 20,300 to 741,700 in June seasonally adjusted and the underemployment rate is at 7.5% so while this data is good and should help ameliorate consumer weakness through time it is not a quick fix
In summary this is a great data point but it is only one data point and won’t be a quick fix for the economy.
But it exactly what the economy needs, employment is the antidote to weak consumer sentiment.