Justin Smirk, analyst at Westpac, points out that Australia’s November Labour Force Survey reported a robust bounce of 37.2k gain in total employment following the -24.8k fall in October.
Key Quotes
“In the last three months the average monthly gain was just 9.5k compared to 8.9k in October and 31.2k back in May, a moderation that is consistent with softer domestic demand.”
“In the year employment grew 254.9k or 2.0%. The pace of employment growth has eased from 2.8%yr in May and with the six month annualised pace a slower 1.6%yr, the annual pace is set to fall below 2.0% in December or early 2020.”
“In the month unemployment fell to 5.2% (5.18% at two decimal places) from 5.3% (5.31% at two decimal places). Participation was flat at 66.0% but it did lift modestly from 65.96% to 66.00% at two decimal places which was enough to see a slightly larger than trend rise in the labour force of 23.4k. November also recorded a 0.2ppt fall in underemployment to 8.3%.”
“The mix of employment did, however, suggest a slightly softer picture than the headline numbers. Just about all of the gains were part-time, which lifted 35.7k, while full-time lifted just 4.2k. Nevertheless, total hours work still lifted 0.2% in the month boosting the annual pace to 1.7%yr from 1.4%yr. This pace is, however, softer than the pace of growth in total employment (2.0%yr).”
“Westpac is expecting a modest gradual rise in unemployment and underemployment. We are a long way from the RBA’s full employment aim of 4.5% and if the Bank wants to use monetary policy to drive the economy in that direction, it has a lot more work to do.”
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