Employment and wages growth continues to weaken despite some positive signs in the economy, with the construction sector expanding for the first time in two years.
Payroll jobs fell 0.8 per cent in the fortnight ending October 17 following a 0.9 per cent drop in the previous two weeks.
Compared to the beginning of the coronavirus pandemic in March, payroll jobs have fallen 4.4 per cent.
Wages also fell by 2.1 per cent in the latest reported fortnight to be down 5.1 per cent since March.
At the same time, retail trade fell 1.1 per cent in September, the Australian Bureau of Statistics has found.
However, retail turnover jumped 6.5 per cent over the September quarter, a solid result for the economic growth calculation due in December.
“This confirms that outside of Victoria, where volumes fell 4.2 per cent as a result of the lockdown, the recovery in household spending is well underway,” BIS Oxford Economics chief economist Sarah Hunter said.
Cutting the cash rate to a record low 0.1 per cent on Tuesday, Reserve Bank governor Philip Lowe said the economic recovery is up and running and the September quarter national accounts will show positive growth.
The construction industry is another sector that appears to have turned a corner, buoyed by house building and less pronounced declines in apartment and engineering works.
The Australian Industry Group/Housing Industry Association performance of construction index rose 7.5 points in October to 52.7, indicating a mild expansion in the sector.
The index has breached the 50-point mark for the first time since 2018.
HIA executive director Geordan Murray said low interest rates, government grants and other fiscal stimulus measures were lifting demand for detached housing.
“These are positive signs that policy settings are working to generate employment throughout the initial phase of the economic recovery,” Mr Murray said.
Dr Lowe said with Australia facing a period of high unemployment, the central bank was committed to doing all that it could to support the creation of jobs.
The cut in the RBA’s cash rate would save more than $30 a month on a $400,000 variable rate mortgage if passed on in full by retail banks.
But the Commonwealth Bank, the nation’s largest retail lender, has instead cut its fixed-rate home loans and some business loan rates and left its variable rate unchanged.
The other three major banks have remained silent.
However, a handful of smaller banks have cut their variable rates from between 0.10 per cent and 0.20 per cent with immediate effect.