Martina Song, Research Analyst at Westpac, notes that the Australia’s Sep labour force survey showed the unemployment rate dipping to 5.6% while the underemployment rate (workers who would like to work more hours) rose to 8.7% in Aug and the difference between the unemployment and underemployment rate has been increasing.
Key Quotes
“This week, RBA’s Lowe noted in his first speech as governor that there is still spare capacity in the labour market, and the Oct meeting minutes too gave a mixed assessment on jobs. Bank staff currently estimate the unemployment rate is around 0.5ppt above full employment.
Recent jobs data have indicated gains in employment have been concentrated in part time work. This partly reflects a shift in the economy towards services, though employment gains have been broadening to more industries. Male participation rates however are falling, especially in the mining states (WA -3.3ppt, Qld -1.9ppt). This data suggests older males becoming disillusioned with the lack of employment and leaving the workforce.
Overall, despite the lower unemployment rate, we see the recent releases as soft updates on the Australian labour market.”
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