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. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.

Feed news

FXStreet Trading Signals now available!

Access to real-time signals, community and guidance now!

Latest Forex News


Latest Forex News

Editors’ Picks

AUD/USD keeps Tuesday’s recovery within familiar region below 0.7000

AUD/USD remains on the front foot around 0.6980 at the start of Wednesday’s Asian session. The pair snapped the previous three-day losing streak the previous day after reversing from 0.6920. Though, 0.7000 threshold remains as the key resistance for the bulls to clear.

AUD/USD News

Gold: Daily chart shows temporary uptrend exhaustion

Gold's daily chart shows a bearish divergence of the MACD, a sign of uptrend exhaustion. A break below the 10-day SMA could prove costly. The metal looks vulnerable to price pullback.

Gold News

USD/JPY: All eyes on BOJ to extend run-up past-107.00

USD/JPY refreshes the intraday high following a U-turn from 107.15. Increasing hopes of virus vaccine follow Wall Street's performance to recall the bulls. News that Tokyo will raise the pandemic to the highest levels, fears of an escalation in the US-China tussle challenge sentiment.

USD/JPY News

WTI: Prints another pullback from $41.00

WTI takes a U-turn from $41.08 to mark fifth failure to stay beyond the $41.00 threshold. 21-day EMA, a three-week-old support line restrict immediate downside. June month high, 200-day EMA offers strong resistance.

Oil News

Euro nears 4-month highs, CAD rate decision

Over the past few weeks, euro has been one of the best performing currencies. It rose to a nearly 4 month high versus the US dollar despite weaker than expected economic data.

Read more

Forex MAJORS

Cryptocurrencies

Signatures