Labour force
-
Employment rose again in April.
Jobs rise again: Employment rose by 14,200 in April after a revised 14,200 lift in jobs in March (previously reported as an 18,100 increase in jobs). Full-time jobs rose by 14,300 in April after falling by 22,800 in March. Part-time jobs were unchanged after rising by 44,600 in March.
- A total of 106,000 new jobs have been created in the first four months of 2014 – marking the best start to a calendar year in six years.
- Jobless rate holds steady: The unemployment rate held steady at 5.8 per cent in April. The participation rate fell from 64.8 per cent to 64.7 per cent.
- Hours worked fell: The number of hours worked fell by 2.5 per cent in April after rising by 0.5 per cent in March. Hours worked are down 2.5 per cent over the year. The ABS notes the timing of Anzac day and Easter may have affected the hours worked statistics.
- Unemployment across states and territories: NSW 5.4 per cent (5.2 per cent in March); Victoria 6.4 per cent (6.4 per cent); Queensland 6.3 per cent (6.1 per cent); South Australia 6.3 per cent (7.1 per cent); Western Australia 4.9 per cent (4.9 per cent); Tasmania 7.6 per cent (7.6 per cent); Northern Territory, trend 3.8 per cent (3.8 per cent); ACT, trend 3.6 per cent (3.5 per cent).
What does it all mean?
- It’s pretty much what the Reserve Bank indicated in recent commentary – the job market is showing signs of stabilising with unemployment having peaked or pretty close to it. The labour market is the lagging indicator in the economy and it is now showing signs of reflecting the recent solid lift in economic activity.
- Job growth has been solid over the past couple of months. In fact a total of 106,000 new jobs have been created since the start of 2014 – marking the best start to a calendar year in six years. There is no question that the economy has lifted and it is pretty clear that the transition in activity from mining to housing construction has been a case of so far so good, and more importantly housing construction is supporting the recent strength in employment.
- In recent weeks Reserve Bank officials have discussed the noticeable lift in business hiring intentions and it seems to be reflected in the latest data. Where are the jobs being created? Well we won’t see those figures for another month, but if we were to make an educated guess, construction, healthcare, finance and retail would be at the top of the list.
- While rate cuts are firmly off the agenda, it is unlikely that the Reserve Bank will shift away from its “interest rate stability” rhetoric any time soon. A few more months of robust employment would be required. The data suggests that a December quarter rate hike is still on the cards. Rising share markets and house price growth is adding to wealth gains, fuelling consumer spending and driving business profitability. At the same time the Aussie dollar is now holding at close to US94c. In short the Australian economy is in a much better place than it was even just six months ago. The next big test for rates will be the Federal Budget released next Tuesday.
