Australia’s jobless rate is at its lowest level in six months despite a drop in the number of people in full-time work in May.
The seasonally adjusted unemployment rate fell to 5.4 per cent as part-time work drove employment growth of 12,000 positions, figures from the Australian Bureau of Statistics show.
Most economists were expecting an increase of 19,000 jobs and an unemployment rate in line with April’s 5.6 per cent.
Full-time employment fell by 20,600 jobs in May, and monthly hours worked in all roles dropped by 1.4 per cent, providing little evidence that wages growth is set to improve.
BIS Oxford Economics macroeconomics head Sarah Hunter said the data was disappointing, with full time employment hardly changed since the start of the year.
She said the unemployment rate dropped to its lowest level since November 2017 because of a falling participation rate – the number of people working or looking for work – dipped to its lowest level in three months.
“Fewer opportunities for work appears to be discouraging some people, leading to them dropping out of the labour force,” Ms Hunter said.
Commonwealth Bank of Australia senior economist Gareth Aird said average jobs growth over the last three months was 11,000 a month, significantly weaker than in 2017 when it averaged 34,000.
The underutilisation rate – unemployment plus underemployment – was flat at 13.9 per cent, and is considered the broadest measure of slack in the labour market, he said.
“We haven’t made any inroads in terms of the level of spare capacity in the labour market over the past nine months,” Mr Aird said.
“Given that a fall in labour market slack is required for wages growth to lift, it looks like we will be waiting for a while yet before we see any meaningful lift in employee pay packets.”
Victoria fared the best of the states, generating 22,100 jobs, and its unemployment rate dropped to 5.1 per cent.
Queensland added 5,000 jobs, lowering unemployment from 6.5 per cent to 6.2 per cent, while NSW gained 2,800 jobs, reducing unemployment to 4.9 per cent.
Western Australia suffered the largest drop in employment, with 1,900 fewer people in jobs, though unemployment also fell to 6.4 per cent.
The ABS figures came as SEEK said it had 10.7 per cent more job ads in May, compared with the same month a year ago, with resources, government and defence among the sectors experiencing the best growth.