Australian Employment Market Update
54,200 more jobs in the market
The ABS reported seasonally adjusted employment increased by 54,200 persons from July to August 2017. Changes in the underlying composition of employment reflected an increase of 40,100 persons in full-time employment and a 14,100 increase in part-time employment. Since August 2016, full-time employment has increased by 251,200 persons, while part-time employment has increased by 74,500 persons.
Seasonally adjusted monthly hours worked in all jobs increased by 6.1 million hours in August 2017 to 1,705.4 million hours.
The seasonally adjusted employment to population ratio increased 0.2 per cent to 61.6 per cent in August 2017, representing an increase of 0.6 percentage points from the same time last year.
The largest increase in employment was in Victoria (up 18,600 persons), followed by Queensland (up 16,700 persons) and New South Wales (up 12,900 persons).
The largest increase in the seasonally adjusted unemployment rate was in Western Australia (up 0.5 percentage points). Queensland and South Australia recorded the largest decrease in the seasonally adjusted unemployment rate (both down 0.5 percentage points), followed by Tasmania (down 0.3 percentage points).
A Global & Australian Economic Perspective
NAB business surveys stated global growth has lifted in mid-2017, heading back towards its trend rate as the pace of advanced economy output expansion picks up. Inflation has remained subdued and financial markets calm, meaning there is little need for aggressive central bank moves on policy. The global economic upturn is expected to continue, while several of the “tail risks” to growth appear to be fading – although North Korea has become the new worry. There is still uncertainty around US economic policy, including how far business taxes will be cut, and how aggressive will a Trump trade policy be?
In Australia, stronger employment, GDP and investment data have seen us revise our forecasts lower for unemployment, and slightly increase our forecasts for GDP growth and inflation. While we remain cautious about aspects of the economic outlook, we now believe the labour market will strengthen enough to allow the RBA to remove some of the emergency stimulus currently in place. We are pencilling in rate rises of 25bps in August and November of 2018 and a further two 25bp hikes in 2019, although the precise path will be data dependent. A cash rate of 2½% by end-19 is still well below the RBA’s estimates of neutral (~3.5% nominal), suggesting monetary policy will remain supportive of the economy.