• Detailed job data: The Bureau of Statistics (ABS) yesterday released detailed labour force figures for demographic groups.
• Record participation by seniors Workforce participation rates (those in jobs or looking for work) are at record highs for the 55-59, 60-64 and 65 plus age groups as well as the 35-44 age group. And participation rates are just below record highs for the 45-54 and 25-34 age groupings
• More seniors: There are more people over 65 years of age in the “civilian population” than in the key “working” demographic of between 25-34 years. One in eight people over the age of 65 are working or looking for work.

What do the figures show and what does it mean?

• Six months ago we noted that there were more people in jobs or looking for jobs than ever before across a raft of age categories. And at that time we suggested there were signs that participation rates seemed to be topping out – starting to trend sideways. But interestingly over the past six months workforce participation rates for those older than 55 years have lifted and to fresh record highs (using 12-month rolling averages).
• But while seniors are more active in the labour force, the participation rate for the 15-19 years grouping continues to trend lower. And the participation rate of 20-24 year Aussies has been largely stable and still well below the record highs set 25 years ago.
• In rolling average terms, the overall labour force participation rate has been rising since May 2015 and now stands at a 2½-year high of 65.0 per cent, but still below the high of 65.5 per cent set in 2011. However a key reason why overall workforce participation is still below record levels is the lower participation rate of young people, with more choosing to do further studies before joining the workforce.
• The latest job numbers also show that there are 3.66 million people over the age of 65 compared with 3.53 million Australians aged between 25-34 years. The number of people over the age of 65 is growing at a 3.4 per cent annual rate. In contrast the number of people aged 25-34 is growing at a 1.58 per cent annual rate (8-year low) and the number aged 35-44 is growing at a 0.21 per cent annual rate – slowest rate recorded.
• Australians are living longer and are opting to stay in the workforce longer – even if on a more casual or part-time basis. But the trends are incredibly positive for Government finances and the economy as a whole. The risk had been that the aging population would lead to lower tax revenues and rising health and social security spending. But a healthier aged population and greater workforce participation by seniors can buy the politicians more time in coming up with a new tax structure that will take the economy forward.

What do the figures show?

Detailed employment data

• A raft of detailed job data for March was released yesterday. Data on employment by industry is released quarterly and the most recent data was published last month. This month we focus on participation rates (proportion of people in jobs or looking for work) across age brackets and have assessed rolling annual averages.
• In the year to March, the participation in the job market of those 25-34 years was 83.2 per cent, just off the record high of 83.3 per cent set in the year to February.
• The participation in the job market of those 35-44 years was 83.8 per cent, a record high.
• The participation in the job market of those 60-64 years was a record high of 56.0 per cent.
• The participation in the job market of those 65 years plus was 12.3 per cent, a record high
• The participation in the job market of those 55-59 years was 73.6 per cent, a record high.
• The participation in the job market of those 45-54 years was 83.4 per cent, just below the record high of 83.6 per cent set in April 2011.
• The participation in the job market of those 20-24 years was 79.2 per cent, up from the record low of 78.0 per cent set in November 2014.
• The participation in the job market of those 15-19 years was 53.8 per cent, up from the record low of 53.2 per cent set in July 2014.
• The number of people in the civilian population aged 65 plus is 3.66 million, up 3.43 per cent on a year ago. Those aged 25-34 years total 3.53 million people (up 1.58 per cent) and those aged 35-44 years total 3.22 million people (up 0.21 per cent).
• There are 3.61 million Aussies not in the labour force and the number is currently falling at a 1.51 per cent annual rate – just off the fastest annual decline seen in the past nine years.
• Average hours worked in the year to March was 32.3 hours. The average measure has been largely unchanged over the past year but down on recent highs of 32.9 hours set in early 2012.

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?

• There are a number of very positive trends that are occurring in the job market. Seniors continue to be more active; overall workforce participation is high; and the number of people not in the labour force is falling at close to the fastest rate in nine years.
• The Budget and forthcoming election debate should focus on the big picture developments in the economy and seek to encourage and extend the encouraging trends. If there are more Australians in work, especially those in their senior years, then there is the greater potential to boost tax revenues and reduce expenditure on pensions, health spending and social security more broadly. Political parties do need to agree on a tax structure that will take the country forward. This should be focussed on attracting and retaining people in the workforce. As a consequence this should mean lower income tax rates and greater reliance on spending or consumption taxes. It would be valuable if the discussion also includes removal of payroll taxes.
• The trends in the job market are encouraging and provide more reasons to be positive on the economy

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