Australia jobless rate hits fresh 48-yr low, even as employment falls

By Wayne Cole

SYDNEY (Reuters) – Australia’s jobless charge dropped to a contemporary 48-year low in July whilst employment broke a super-strong run with the primary fall this 12 months, a blended report that may trace at some cooling within the red-hot labour market.

Figures from the Australian Bureau of Statistics out on Thursday confirmed the jobless charge dipped to three.4%, when analysts had seemed for it to carry at 3.5%. That was the bottom charge since August 1974 and solely added to proof the labour market was drum-tight.

But web employment additionally stunned by falling 40,900 in July, lacking forecasts of a 25,000 enhance and the primary drop since October final 12 months.

Additional clouding the image, the variety of unemployed additionally fell 20,200 and unexpectedly took the participation charge all the way down to 66.4%, from 66.8%.

All this statistical noise restricted the market influence with the native greenback down only a fraction to $0.6927, whereas futures continued to wager the Reserve Financial institution of Australia (RBA) would maintain elevating rates of interest undeterred.

Bjorn Jarvis, head of labour statistics on the ABS, famous July coincided with winter college holidays and employee absences related to COVID-19 which dragged down hours labored.

“Throughout the pandemic, it has not been unusual to see larger-than-usual adjustments or slowing in employment and hours round college holidays,” mentioned Jarvis.

There have been additionally indicators of power in measures of underemployment and underutilisation which fell to the bottom since 1982, and these are inclined to correlate properly with rising wages.

Knowledge out Wednesday confirmed wage development rose modestly within the June quarter to 2.7%, far behind inflation at 6.1%. But, that was nonetheless an eight-year excessive and pay development granted within the non-public sector did speed up to three.8%.

Enterprise surveys have proven companies struggling arduous to seek out appropriate labour and prepared to pay to retain workers.

The RBA has emphasised that its liaison with enterprise reveals pay and bonuses are on the best way up and rising labour prices will solely add to inflationary pressures.

Searching for to chill the economic system, the central financial institution has already lifted rates of interest by 175 foundation factors since Could to succeed in 1.85% and markets are priced for a peak round 3.6% by April subsequent 12 months.

“Labour demand indicators stay agency, which suggests the autumn in employment in July can be quick lived,” mentioned Sean Langcake, head of macroeconomic forecasting for BIS Oxford Economics.

“All indicators level to a really tight labour market.”

(Reporting by Wayne Cole; Modifying by Muralikumar Anantharaman & Shri Navaratnam)