As a former Macquarie employee and with relatives based in Australia, take it from me — Australians are awesome and the country is great.
But if that weren’t enough of a reason to move, then June job creation just blew away expectations by 200%, slashing the unemployment rate down to its lowest level since January 2009:
In June, the labour market posted a net rise of 45,900 jobs, about three times the total number that had been predicted by economists and the biggest net jobs gain since since January. Of the new positions, 18,400 were full-time and 27,500 part-time.
Revised data issued by the Australian Bureau of Statistics show that the jobless rate for May was also 5.1 per cent, a tenth of a percentage point better than originally recorded.
“Brilliant. What can you say? This is a very healthy economy,” ICAP economist Adam Carr said.
“Jobs growth is strong – that is fantastic news. This is what it’s all about. As long as we can all get a job, we’re all happy.”
Ha. When was the last time you saw economic commentary like this come out of the U.S. or Europe? Just beware of the income taxes down there, but at least you’ll have an income.
Still, there’s one qualification to the latest data, even though it was ‘spectacular’, says Roland Randall at TD Securities in his latest noe:
The one qualification to the strength of this report is the skew towards part-time jobs. At this point in the economic cycle jobs are normally being converted from full-time to part-time, so that part-time employment actually falls. This is the pattern we have seen since March.
Still, despite the qualification, Mr. Randall believes the latest result makes an interest hike in August more likely, and throws cold water on forecasts for an actual interest rate cut to support the economy. Note that inflation has been soaring in Australia as well, which also argues for a hike.
We continue to stick with our call for a hike as soon as August, although much will depend on the July 28 inflation report. Inflation needs to be truly shocking to prompt the RBA to raise rates in August, as the Board has already signalled it expects inflation at or above its 3% policy target band for the near-term.
Or then expect a hike by November if inflation doesn’t shock in the near-term.
Still, the key take-away is that Australia continues to boom relative to the world, especially the developed one. Despite the challenges it faces on the inflation, housing, and China-dependence front, Australia must be one of the best performing developed-world economies right now.
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