Australia’s jobless rate remained steady at a seasonally adjusted 5.0 per cent in January, but a jump in full-time employment could reassure the Reserve Bank there is positive underlying momentum in the economy.
Data released Thursday by the Australian Bureau of Statistics matched consensus expectations and showed a net increase of 39,100 persons with work, including 65,400 more people in full-time employment and 26,300 fewer people in part-time employment.
The full-time jobs boost knocked the seasonally adjusted underemployment rate down from 8.3 per cent to 8.1 per cent, while the participation rate increased by 0.1 percentage points to 65.7 per cent.
The Australian dollar spiked above 72 US cents for the first time in two weeks on the release of the data, but plunged back to 71.50 by 1245 AEDT.
The drop followed predictions of a double rate cut in 2019 – one in August and one in December – by Westpac chief economist Bill Evans.
BIS Oxford Economics analyst Sarah Hunter said while Thursday’s jobs data was positive, especially the lift in full-time work, she remained cautious about the nation’s economic outlook.
‘Strong employment growth will help to support consumer spending and therefore GDP growth, but households continue to face weak growth in wages and other sources of income,’ she said.
‘Residential construction is also set to become a bigger drag on momentum as we move through 2019.’
Lacklustre December quarter wage data on Wednesday tested the RBA’s narrative on the health of the economy, with analysts pinning hopes on an increase jobs to stimulate spending amid a housing downturn.
Ms Hunter said a steady unemployment rate would likely see the cash rate kept on hold this year.
‘Growth will be strong enough to not require a cut, but not strong enough to warrant a rate rise until the end of 2020 at the earliest,’ Ms Hunter said.
In seasonally adjusted terms, the largest increase in employment in January was in NSW, a 47,200 net increase cutting the state’s unemployment rate from 4.4 per cent to 3.9 per cent.
There were 2,200 more jobs in Victoria and 700 more in WA, though the unemployment rate rose in both states.
The largest decrease in jobs was in Queensland, down 19,900, though the state’s unemployment rate edged slightly lower.
The youth unemployment rate edged slightly higher to 11.5 per cent despite an 8,300 net increase in the number of part-time jobs.
There was a 5,900 net decrease in full-time employment among 15 to 24 year-olds, including a 12,000 drop in the number of young women employed full time.