Job market winners & losers:
Cairns, Bendigo & NSW Riverina lead the way
Detailed labour force
Regional unemployment: The regions with the highest unemployment rates are dominated by Queensland, South Australia and Western Australia. The regions with the lowest jobless rates can be predominately found in NSW, ACT and Victoria.
The detailed job data can influence interest rate policy and government spending decisions.
What does it all mean?
• The Reserve Bank is targeting a national unemployment rate of 4.5 per cent. So how are we progressing?
• Of Australia’s 87 SA4 regions, 30 of the regions have a jobless rate at or below 4.5 per cent (using rolling annual averages). At the other end of the scale, 23 regions have jobless rates of 6 per cent or above.
• The average unemployment rate across all regions is 5.2 per cent. Progress is being made but a significant amount of spare capacity exists – albeit largely outside Sydney and Melbourne.
What do the figures show?
• Unemployment rates were assessed across the 87 SA4 regions where data is available from the Australian Bureau of Statistics (ABS). Data is available up to July and rolling annual averages were used for assessment to adjust for seasonality.
• In the year to July the highest unemployment rate could be found in the Queensland Outback (14.6 per cent), followed by Moreton Bay North (Qld 9.0 per cent) and Logan-Beaudesert (Qld 8.0 per cent).
• Lowest unemployment rates can be found in Sydney: Sutherland (2.2 per cent); Inner West (2.4 per cent); and Northern Beaches (2.8 per cent)
• If the latest unemployment rates are compared with ‘normal’ levels (decade averages), encouragingly 65 regions have jobless rates that are below ‘normal – or better than the ‘average’ experience. Again, NSW and Victorian regions dominate the list but the average jobless rate in Cairns for the year to July was 4.4 per cent – almost 42 per cent lower than the decade average of 7.5 per cent.
• At the other end of the scale, the 5.4 per cent jobless rate in Darling Downs-Maranoa was almost 44 per cent above the decade average of 3.8 per cent.
• Cairns, Bendigo and the NSW Riverina are areas showing what is possible with job creation.
What is the importance of the economic data?
• The Australian Bureau of Statistics (ABS) provides detailed labour market figures one week after releasing ‘top level’ statistics of employment & unemployment levels across states and territories. The detailed data is useful in identifying broader underlying trends and instructive about the health of the economy.
What are the implications for interest rates and investors?
• CommSec expects another rate cut in November and is pencilling in a further reduction in February 2020.
• But the Reserve Bank can only do so much. Federal and State governments need to look at initiatives to encourage employment creation including fast-tracking infrastructure projects. Companies across Australia report that projects are being rolled out too slowly. The Reserve Bank is constantly liaising with business – hopefully those insights – as well as those by business groups – are being shared with policymakers
Published by Craig James, Chief Economist, CommSec