Labour force
  • Employment rose by 33,500 in August after falling by 41,000 in July (consensus: +35,000). Full-time jobs rose by 58,800 while part-time jobs fell by 25,300.
  • The unemployment rate rose from a 48-year low of 3.4 per cent to 3.5 per cent, the first increase in 10 months. To 2-decimal places the jobless rate stands at 3.46 per cent. The number of unemployed rose by 14,000.
  • The participation rate rose from 66.4 per cent in July to 66.6 per cent in August.

The big picture  

  • More people found work in August but even more people were looking. Aussies worked more hours after July’s labour market disruptions. The jobless rate ticked up a notch. Overall, there were no significant changes over the month. The job market remains tight. But there was volatility in some of the state results in August. The Queensland jobless rate hit a record low of 3.2 per cent. The key question is whether we are near – or at – full employment.

The Equity Lens: What does it mean for investors?  

  • The key reason why businesses are doing well is because more people have jobs. And some of those people are getting wage increases as well. If that situation changes – jobs fall and unemployment rises – the risk is that consumer spending will slump. Job security is paramount. So it is important that the Reserve Bank gets it right – not being too aggressive in lifting rates. The Reserve Bank Governor will be grilled by politicians tomorrow.
  • The key issue for most firms is that they can’t get the staff they need. And the cost of the available workers continues to rise. There is a sweet spot in terms of accessing the workers (and thus lifting output) and the cost of that labour. Working existing employees’ harder or using technology and equipment may be better options to hiring more staff.
  • The supply of workers will be lifted by migration and skilling up the workers in demand. And slower economic growth will trim the demand for new staff. So the jobless rate is expected to lift modestly towards 4 per cent over the next year.
  • CBA Group economists tip two more 25 basis point rate hikes before the end of the year. One thing to watch is whether businesses lose some of their ability to pass on cost increases to consumers.

The facts & figures

Labour force – August

  • Employment fell by 33,500 in July (consensus: +35,000) with full-time jobs up by 58,800 while part-time jobs fell by 25,300.
  • The unemployment rate rose from a 48-year low of 3.4 per cent to 3.5 per cent. To 2-decimal places the jobless rate stands at 3.46 per cent. The number of unemployed rose by 14,000.
  • The participation rate rose from 66.4 per cent in July to 66.6 per cent in August.
  • The underemployment rate fell from 6.0 per cent to 5.9 per cent in August. And the underutilisation rate remained at 9.4 per cent (lowest rate since April 1982).
  • The youth unemployment rate rose from 7.0 per cent (lowest since August 2008) to 8.4 per cent in August after falling from 7.9 per cent in June.
  • Hours worked rose by 0.8 per cent to 1,854 million in August, and were up 7.9 per cent on a year ago.
  • Unemployment rates across states/territories in August: NSW 3.4 per cent (July: 3.3 per cent); Victoria 3.7 per cent (3.1 per cent); Queensland 3.2 per cent, record low (3.8 per cent); South Australia 3.9 per cent (4.0 per cent); Western Australia 3.1 per cent (3.2 per cent); Tasmania 4.9 per cent (3.7 per cent); Northern Territory 4.5 per cent (3.5 per cent); ACT 2.7 per cent, 3-year low (3.3 per cent).
  • Employment across states/territories in August: NSW +4,100; Victoria -700; Queensland +1,400; South Australia +10,200; Western Australia +900; Tasmania -100; Northern Territory +1,300; ACT +3,400..

Originally published by CommSec

 

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