Record Aussie hiring blitz

Labour force

Employment soared by a record 366,100 jobs in November.

Part-time jobs surged by 237,800 – the second most ever – with full-time jobs up by a record 128,300.

The participation rate rose from 64.6 per cent to 66.1 per cent in November.

The unemployment rate fell from 5.2 per cent to 4.6 per cent in November.

Hours worked jumped by 4.5 per cent in November to 1,801 million to be up 2.7 per cent on a year ago.

The underemployment rate dropped from 9.5 per cent to 7.5 per cent in November.

Unemployment across states in November: NSW 4.6 per cent (October: 5.4 per cent); Victoria 4.7 per cent (5.6 per cent); Queensland 4.8 per cent (5.1 per cent); South Australia 4.6 per cent (5.3 per cent); Western Australia 3.8 per cent (3.9 per cent); Tasmania 5.1 per cent (5.1 per cent); Northern Territory 4.4 per cent (3.9 per cent); ACT 3.8 per cent (6.6 per cent).

Employment across states in November: NSW +179,700; Victoria +141,000; Queensland +14,300; South Australia +10,100; Western Australia +22,700; Tasmania +1,800; Northern Territory -2,400; ACT +8,000.

What does it all mean?

• Aussie employers embarked on a hiring blitz in November with a record-breaking 366,100 workers landing a new job or were re-hired after an easing of Delta Covid-19 restrictions in Australia’s south-east. The job surge was also driven by the return to work of people with jobs who were not previously counted as employed as social distancing measures prevented them from attending work places. Employment in NSW (+179,700), Victoria (+141,000) and the ACT (+8,000) all lifted as businesses resumed ‘normal’ operations from October as lockdowns ended.

• Other measures of labour demand also rebounded with the number of hours worked rising sharply (+4.5 per cent) as employees returned to work. And workforce participation rebounded with the participation rate increasing from 64.6 per cent in October to 66.1 per cent in November as the economy re-opened and government support measures were wound back. And the big increase in jobs outweighed the lift in labour supply, resulting in a fall in the unemployment rate from 5.2 per cent to 4.6 per cent in November. And the underemployment rate dropped from 9.5 per cent to 7.5 per cent.

• Of course, the November labour force survey – conducted between October 31 and November 13 – could understate the actual rebound in employment with some workers unlikely to have been employed until December, given lags between the end of lockdowns and the commencement of new jobs.

• Recently released job advertisements and vacancies data have been incredibly strong with some businesses desperately trying to hire workers ahead of the busy Christmas and summer holiday period. The National Skills Commission reported earlier this week that national skilled internet job vacancies hit 13-year highs of 252,312 positions in November. And ANZ’s job ads gauge also hit 13-year highs in November with 222,093 available positions. While online job marketplace SEEK posted the highest number of job advertisements in over 23 years last month with record vacancies posted in Victoria, Northern Territory, Queensland, South Australia and Tasmania.

• News, however, that SEEK’s measure of applications per job ad fell by 9.4 per cent in November will worry business owners, with a ‘worker drought’ and skills shortages widely reported across the IT, trades, agriculture, retail, hospitality and tourism industries. While foreign worker shortages have helped tighten the labour market prior to the Delta outbreaks, Australia’s high vaccination rates and the imminent reopening of international borders could in fact boost labour supply and curtail wage pressures.

• The Reserve Bank (RBA) has made it ‘crystal clear’ that wages probably need to be growing at an annual rate of at least 3 per cent for inflation to sit sustainably in the middle of its 2-3 per cent inflation target. But with spare capacity likely to persist in the labour market following the Delta shock, policymakers don’t expect this goal to be reached for the foreseeable future. In fact, in the latest Board meeting, Governor Philip Lowe said the “Board is prepared to be patient,” because the tightening of the labour market and “pick-up [in wages growth] is expected to be only gradual.”

• That said, Commonwealth Bank (CBA) Group economists expect wages to rise faster than the RBA’s forecasts on the back of a buoyant economy in 2022. The RBA expects the unemployment rate to approach 4 per cent with annual wages growth to be around 3 per cent – both conditions deemed necessary for a lift in the cash rate – by the end of 2023. But CBA Group economists estimate that the jobless rate will hit 4.1 per cent by the end of 2022, with annual wages growth of 2.8 per cent, pushing the annual growth rate in trimmed mean consumer prices to 2.5 per cent. Lift-off for the cash rate is expected, therefore, in November 2022.

• The RBA will make a decision on the bond buying program at the February 2022 Board meeting – with CBA Group economists favouring a further taper to $A2 billion per week until May 2022, but acknowledge the risk has increased that an end to the program is announced.

Published by Ryan Felsman, Senior Economist, CommSec