Australia: Employment momentum carries on - Westpac

Simon Murray, Research Analyst at Westpac, notes that the Australian unemployment rate falls as employment momentum carries on, led by a lift in part-time employment in NSW and VIC, and a notable broad-based gain in WA.

Key Quotes

“Employment increased by 19.8k, broadly in line with the market median forecast of +15.0k and Westpac’s forecast of +25.0k. Part-time employment grew 13.7k, while full-time rose 6.1k, though importantly hours worked posted a solid 0.7% gain. This brings annual employment growth to 3.1% with total hours worked at 3.4%.”

“The unemployment rate fell to 5.5% with the participation rate holding at 65.2% though August’s number was revised lower from 65.3%. Note that at two decimal places, participation fell slightly to 65.21% from 65.25%, with male participation falling to 70.7% from 70.8% and female participation falling to 59.8% from 59.9%.”

“By state, the most notable was the broad-based gain in WA with employment up 8.3k (+4.5k full-time, +3.8k part-time). This saw hours worked increase by the largest of the states, +1.1%. Other standouts were NSW and Vic, up 21.1k and 8.9k respectively. While this was mainly driven by part-time employment growth (NSW +21.1k, Vic +14.2k), again note robust gains in hours worked of 0.7% and 0.6% respectively.”

“Overall, the result is another solid employment release, in line with what forward indicators have been suggesting. While the lower unemployment rate is a good outcome, declining to a four-year low, note that labour market slack still lingers, evident in other measures such as the underemployment rate (8.6% in August – released quarterly) and ongoing sluggish wage growth.”