What does it all mean?

• It’s all running pretty much to plan. When economic activity picks up, employers tend to work existing staff more intensively and perhaps take on more casual staff. When employers get more confident, they will take on more part-time or casual staff. And when businesses assume that the pick-up in orders and production will be sustained, they will take on full-time staff and attempt to convert part-time staff to full-time employees.
• At present, both the number of hours worked and part-time employment are retreating, while full-time staff are advancing. In fact more than 100,000 full-time jobs have been created in 2014 – the best start to a year in seven years.
• Certainly the job market still is far from robust, but it’s looking more likely that the unemployment rate has peaked. The key question is whether the jobless rate will just stabilise just under 6 per cent or whether it starts declining in the second half of the year. The trend in the jobless rate will determine when the Reserve Bank starts lifting rates.
• Clearly the Reserve Bank has no need to be moving rates in any direction at present. The earliest timing of the first rate hike is November/December. But if the Federal Budget and warm autumn/winter robs momentum from the economy, the Reserve Bank won’t need to touch rates until 2015.
• The jobless rate in the Northern Territory stands at a three-year low of 3.3 per cent. If anyone wants a job, they are crying out for staff in the top end.

What do the figures show?

Labour force:

• Employment fell by 4,800 in May after rising by a revised 10,300 in April (previously reported as a 14,200 increase in jobs). Full-time jobs rose by 22,200 in May after rising by 13,800 in April. Part-time jobs fell by 27,000 in May after falling by 3,600 in April.
• The unemployment rate held steady at 5.8 per cent in May. The participation rate fell from 64.7 per cent to 64.6 per cent.
• The number of hours worked rose by 1.7 per cent in May after falling by 2.2 per cent in April. Hours worked are up 1.2 per cent over the year.
• The annual employment growth rate was steady at 0.9 per cent in May. The working age population grew by 29,900 people in May and by 339,800 over the year or 1.82 per cent.
• Unemployment across states and territories: NSW 5.7 per cent (5.4 per cent in April); Victoria 6.2 per cent (6.4 per cent); Queensland 6.2 per cent (6.3 per cent); South Australia 6.8 per cent (6.2 per cent); Western Australia 5.0 per cent (4.9 per cent); Tasmania 7.5 per cent (7.6 per cent); Northern Territory, trend 3.3 per cent (3.5 per cent); ACT, trend 3.7 per cent (3.7 per cent).
• Jobs across states and territories: NSW -22,200; Victoria +19,500; Queensland +2,400; South Australia -4,500; Western Australia +6,800; Tasmania -3,800; Northern Territory, trend +900; ACT, trend -400.
• The Labour Force estimates are derived from a monthly survey conducted by the Bureau of Statistics. The population survey is based on a multi-stage area sample of private dwellings (currently about 22,800 houses, flats, etc.) and a sample of non-private dwellings (hotels, motels, etc.). The survey covers about 0.24 per cent of the population of Australia and includes all people over 15 years of age, except defence personnel.
  • If more people are employed, then there is greater spending power in the economy. But at the same time companies may adjust the work hours of employees. If employees work less hours, and therefore get paid less, then spending power in the economy is reduced.
  • The solid lift in full-time job creation in 2014 should provide a boost to consumer sentiment, together with the stabilisation of the jobless rate below 6 per cent. It all depends on how much airplay the good news gets. Certainly more full-time jobs lead to higher consumer spending.
  • The job market is playing out nicely. The Reserve Bank has no work to do in either cutting or lifting rates.

Why is the data important?

• The Labour Force estimates are derived from a monthly survey conducted by the Bureau of Statistics. The population survey is based on a multi-stage area sample of private dwellings (currently about 22,800 houses, flats, etc.) and a sample of non-private dwellings (hotels, motels, etc.). The survey covers about 0.24 per cent of the population of Australia and includes all people over 15 years of age, except defence personnel.
• If more people are employed, then there is greater spending power in the economy. But at the same time companies may adjust the work hours of employees. If employees work less hours, and therefore get paid less, then spending power in the economy is reduced.

What are the implications?

• The solid lift in full-time job creation in 2014 should provide a boost to consumer sentiment, together with the stabilisation of the jobless rate below 6 per cent. It all depends on how much airplay the good news gets. Certainly more full-time jobs lead to higher consumer spending.
• The job market is playing out nicely. The Reserve Bank has no work to do in either cutting or lifting rates.