Australia: Mixed labour force data in May - Westpac

Andrew Hanlan, analyst at Westpac, notes that the Australia’s labour force data was a mixed bag in May as the hours worked, weakened and were down by -0.3% while the unemployment rate held steady at 5.2%, and while the underemployment rate rose further, to 8.6%.

Key Quotes

“Employment, exceeded expectations, up 42.3k, largely part-time, +39.8k. Employment by state was: NSW, +38.5k; Vic +28.6k; Qld +7.8k; SA, +4.4k; WA -4.0k, Tas -0.4k. In addition, employment for April was revised up, to +43.1k from +28.4k.”

“Employment gains exceeded expectations, +42.3k v’s market median +16k and Westpac +5k.”

“However, hours worked weakened, contracting by 0.3% in the month. We’d note that if the lift in jobs in May was largely a spike associated with people working on the May 18 Federal election, it would be reasonable to expect hours worked to strengthen, not weaken.”

“The unemployment rate disappointed, holding steady at 5.2%, vs market median 5.1% and Westpac 5.2%. Unemployment has drifted higher in 2019, up from 5.0% at the start of the year. During 2018, some progress was made in reducing the unemployment rate, from 5.5% to 5.0% by September.”

“Adding weight to this view, the underemployment rate now appears to be trending higher, rising to 8.6%, up from 8.5% in April and up from a low of 8.1% in February. This is back to the levels prevailing over the second half of 2017.”

“These mixed results may, in part, be due to sample rotation issues. The ABS notes that “In original terms, the incoming rotation group in May 2019 had a higher employment to population ratio than the group it replaced (64.0% in May, compared to 62.3% in April 2019), and was higher than the ratio for the entire sample (62.9%).”

“For now, jobs growth momentum remains robust. Employment is 2.9% higher than a year ago, with full-time employment up by 3.1% and part-time some 2.4% higher. Over the past six months, jobs growth is 2.7% annualised.”

“Looking ahead, we see the risk that jobs momentum slows, consistent with the weakening of domestic demand. In the year to mid-2018, domestic demand grew by a robust 3.2%, moderating to a 1.8% annualised pace over the second half of the year, and then slumping to only a 0.6% annualised pace in the opening quarter of 2019.”

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility.

Feed news

Latest Forex News

Editors’ Picks

EUR/USD pressured around 1.1200 amid dovish ECB comments

EUR/USD is trading around 1.1200 after ECB officials expressed concern about global growth President Draghi will speak later. Tension is rising toward the Fed decision after US retail sales surprised on Friday.


GBP/USD pressured below 1.2600, Conservative contest in focus

GBP/USD is trading below 1.2600, consolidating the losses seen on Friday after US retail sales beat expectations. The Conservative contest is heating up ahead of tomorrow's second vote.


USD/JPY: wait-and-see continues ahead of Fed

The dollar consolidates its gains against most rival, and scarce data exacerbates the quietness. USD/JPY bullish above 108.90, bearish below 108.10.


Gold: 100-month MA is a level to beat for the bulls

Gold (XAU/USD) is struggling to cut through key technical line which proved a tough nut to crack in 2018. The yellow metal rose to $1,358 on Friday, but the break above the 100-month MA.

Gold News

Gold: Signs of bullish exhaustion ahead of the Fed

Gold's rally seems to have run its course with signs of bullish exhaustion emerging on technical charts ahead of Wednesday's FOMC (Federal Open Market Committee) rate decision.

Read more