Australia: Another solid labour market report – ANZ

Felicity Emmett, senior economist at ANZ, notes that the Australian employment rose a strong 25.7k in March, following an upwardly revised rise of 10.7k in February (previously +4.6k).

Key Quotes

“Full-time jobs dominated the gain with a rise of 48.3k, while part-time jobs fell 22.6k. While the full-time/part-time split jumps around month to month, the annual growth rates tell a compelling story – full-time jobs are up 3.4% y/y, while part-time employment is up just 0.4%.”

“After edging down last month, the unemployment rate ticked back up to 5.0%, while the participation rate rose to 65.7% (from 65.6%). The underemployment rate also edged up (from 8.1% to 8.2%).”

“Across the states, unemployment rose in Queensland, South Australia, Western Australia and Tasmania, while it ticked lower in New South Wales and Victoria.”

“The recent strength in the labour market is consistent with the RBA’s business liaison showing firms’ hiring and investment intentions remain solid. But as the minutes from the RBA’s April meeting acknowledged “forward-looking indicators of labour demand had been mixed in recent months”.”

“Our ANZ Labour Market Indicator suggests that employment growth will slow, but that the unemployment rate should remain broadly flat. If we are correct, this should keep the RBA on the sidelines. The next major data input for the RBA is the Q1 CPI due out next week, where we expect a 0.4% q/q and 1.7% y/y result for underlying inflation.”