Australia: Unemployment rate steady despite zero employment growth – ANZ

Catherine Birch, senior economist at ANZ, notes that the Australian employment increased by just 500 workers in June, as the 21.1k gain in full-time employment more than offset the 20.6k fall in part-time employment.

Key Quotes

“After spiking at 2.9% y/y on the back of the inflated May result (due to the election), growth fell back to 2.4% y/y.”

“The unemployment rate was unchanged at 5.2% despite zero monthly employment growth and the participation rate fixing at the historic peak of 66.0%.”

“In a positive sign, the underemployment rate fell 0.4ppt back to 8.2%, on the back of the rebound in full-time employment, recovering most of the 0.5ppt rise over the past three months. This brought the total labour market underutilisation rate down to 13.4%. Still too high for the RBA’s comfort.”

“The ANZ Labour Market Indicator suggests that employment growth will slow further and that the unemployment rate will stick around the 5.2-5.3% mark for the remainder of 2019. Without signs of progress on unemployment, we expect to see further easing by the RBA before year-end.”