Robert Carnell, chief economist at ING, notes that Australian employment growth in May was up 42.3 thousand, and there were some upward revisions to the previous month’s total, which was similar at 43.2 thousand (formerly reported as 28.4K).
“The problem comes with the details. Full-time employment rose only 2 thousand four-hundred. So more than 94% of all employment created was part-time. And barely two-thousand full- time jobs have been created in total in the last two months.”
“Even so, a job is a job, and that ought to help lower the unemployment rate. But jobs created is not the same as unemployment reduced. Unemployment only fell by two thousand in May from April, and even with the participation rate rising a bit (66% from 65.9%) the denominator (labour force) didn’t rise enough, and the numerator (unemployment) didn’t fall enough to nudge the unemployment rate down from 5.2%, even on rounding.”
“With the RBA believing that an unemployment rate of 4.5% (perhaps even lower if Assistant Governor Luci Ellis is to be believed) is now necessary to push inflation higher, and today’s figure showing the gap between the current unemployment rate and the full employment rate as wide as ever, about the only conclusion you can draw is that the RBA will need to provide further monetary stimulus to bridge that gap.”