David Plank, head of Australian economics at ANZ, notes that Australian employment increased by 42.3k in May, with part-time jobs rising by 39.8k and full-time jobs up just 2.4k.
“Annual jobs growth accelerated to 2.9% y/y, its strongest pace since mid-2018. Given the sharp slowdown in GDP growth since then it seems unlikely that jobs growth can sustain this pace. Indeed, most indicators are pointing to a sharp slowing in jobs gains over coming months – though admittedly many indicators have been pointing to a slowdown for some time that has not (yet) materialised.”
“The election likely played a major part in the strength of the jobs figures.”
“The unemployment rate was 5.2% in May, unchanged from April and despite the strong gain in jobs. This reflected a rise in the participation rate to 66% for the first time in history. Total labour market underutilisation was also unchanged at 13.7%.”
“Employment growth has accelerated; moving in the opposite direction from what our ANZ Labour Market Indicator would suggest. We do not think this will continue, however, and we see the increased slack in the labour market as a barrier to improving wage growth and inflation.”