Employment rose for the 10th straight month, up by 27,900 in July after rising by 20,000 in June (previously reported as a rise of 14,000 jobs). Full-time jobs fell by 20,300 while part-time jobs rose by 48,200. Economists had tipped a 20,000 increase in jobs.
Hours worked fell by 0.8 per cent in July and were up by 1.9 per cent over the year. Trend hours worked rose 2.5 per cent over the year (19-month high).
The unemployment rate eased from 5.7 per cent to 5.6 per cent. The participation rate rose 0.1 percentage points to 65.1 per cent.
Industry wages: The average wage across Australia stands at $80.246. The highest average wage can be found in the Mining sector at $132.657 per year.
Wage winners: Wages are rising the most in Arts and Recreation Services (up 6.7 per cent over the year to May) followed by Administrative and Support Services (up 5.4 per cent).
What does it all mean?
Move on, move on. Nothing to see here. That is the best way to sum up the latest job data. More people are looking for work, more people are finding work, and fewer are unemployed. And the data is not a fluke. Over the past five months, 189,100 jobs were created – the best equivalent period for job creation in 12½ years. And the outlook for the job market remain positive.
After posting the strongest back to back full-time job gains in 30 years, some correction was to be expected. But while full time jobs fell in July, this was more than offset by part-time job creation. Overall the job market is in good health and all the lead indicators point to further improvement ahead. Certainly business conditions are the best in a decade and retail spending in the latest quarter was the best in eight years.
Stronger employment means more people have money in their pockets, ready to spend. A stronger economy also means higher revenue and profits and clearly that is positive for sharemarket investors and superannuants.
Wages are rising around 2 per cent a year, right? Unless you are in the ‘Arts and Recreation services’ sector where wages are up 6.7 per cent over the year. Or in Administrative and Support Services where wages are up 5.4 per cent. Apparently workers in these industry sectors are in high demand.
What do the figures show?
Employment rose by 27,900 in June after rising by 20,000 in June (previously reported as a rise of 14,000 jobs). Full-time jobs fell by 20,300 while part-time jobs rose by 48,200. Economists had tipped a 20,000 increase in jobs.
Hours worked fell by 0.8 per cent in July and were up by 1.9 per cent over the year. Trend hours worked rose 2.5 per cent over the year (19-month high).
The unemployment rate eased from 5.7 per cent to 5.6 per cent. The participation rate rose 0.1 percentage points to 65.1 per cent.
In trend terms, employment rose by 26,000 in June with unemployment at 5.6 per cent.
Unemployment across states in July: NSW 5.0 per cent (June 4.8 per cent); Victoria 6.1 per cent (5.9 per cent); Queensland 6.2 per cent (6.5 per cent); South Australia 6.2 per cent (6.6 per cent); Western Australia 5.4 per cent (5.6 per cent); Tasmania 6.3 per cent (5.6 per cent). In trend terms unemployment in the Northern Territory was steady at 3.2 per cent; ACT unemployment rose from 4.5 per cent to 4.8 per cent.
Jobs across states and territories in July: NSW +600; Victoria -2,300; Queensland +27,000; South Australia +800; Western Australia -1,200; Tasmania -2,200. Trend terms: Northern Territory -1,600; ACT flat.
The working age population rose by 25,300 in July. The working age population rose by 320,000 (1.64 per cent) over the last year, just below the fastest growth in 45 months.
Average Weekly Earnings:
Average weekly ordinary time earnings rose by 0.6 per cent in the six months to May 2017 to be 1.8 per cent higher than a year ago. Male wages rose by 1.5 per cent over the year while female wages rose by 2.5 per cent.
Average weekly total earnings for adults rose by 2.1 per cent over the year.
The average wage in November 2017 was $80,246.
Wages rose most over the year in Arts and Recreation services (up 6.7 per cent), Administrative and Support Services (up 5.4 per cent), and Rental, Hiring and Real Estate Services (up 4.7 per cent).
Wages were weakest over the past year in Manufacturing (down 2.6 per cent), Mining (down 1.8 per cent), Transport, Postal and Warehousing (up 0.5 per cent) and Finance & Insurance (up 0.6 per cent).
Across states & territories, we have calculated average annual wages as follows: NSW $80,382, Victoria $78,712, Queensland $77,860, South Australia $75,416, Western Australia $89,164, Tasmania $70,413, Northern Territory $84,058 and ACT $92,347.
The highest average wage can still be found in the Mining sector at $132,657 per year. Next highest is Information media & telecommunications ($96,262), and Finance & insurance services ($95,326).
The lowest average wage is obtained by workers in the Accommodation and food services sector ($57,122), followed by Retail trade ($58,464), “Other services” ($62,733) and Manufacturing ($69,082).
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. ½
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 ABS publishes the Average Weekly Earnings (AWE) series on a six-monthly basis. While the Wage Cost Index allows analysis of wage movements from quarter-to-quarter, the AWE series is best seen as a measure of actual dollar figures for wages. But average weekly earnings figures can be distorted by changes such as the relative growth of high-paid to low-paid jobs and the cashing out of bonuses in ordinary earnings.
What are the implications?
The job market is improving but as always it is the sectors in demand that are getting the best pay increases. Annual growth has averaged 2 per cent in the past two years. But in the high-flying Rental, Hiring and Real Estate Services sector, wage increases have averaged nearly 6 per cent with wages up 5 per cent in the Arts & Recreation Services sector and 3 per cent wage increases in Healthcare and Education.
The Reserve Bank will be heartened. All is still on track. There is no need to lift or cut rates. The Reserve Bank will be on the rate sidelines for quite a while yet.
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