Labour force
- Employment rose by 4,900 in March after a 6,300 fall in jobs in February (previously reported as a rise of 17,500 jobs). Full-time jobs fell by 19,900 while part-time jobs rose by 24,800. Economists had tipped an increase in total jobs of around 20,000.
- Hours worked rose by 0.3 per cent in March and were up by 3.2 per cent over the year. Trend hours worked were flat in March and were up 2.6 per cent over the year.
- The unemployment rate was steady at 5.5 per cent. The participation rate eased from 65.6 per cent to 65.5 per cent.
- Unemployment across states in March: NSW 5.0 per cent (February 4.8 per cent); Victoria 5.2 per cent (5.7 per cent); Queensland 6.0 per cent (6.2 per cent); South Australia 5.6 per cent (6.2 per cent); Western Australia 6.9 per cent (6.1 per cent); Tasmania 6.1 per cent (6.0 per cent). In trend terms unemployment in the Northern Territory fell from 4.0 per cent to 3.9 per cent; ACT unemployment was steady at 4.1 per cent.
- State/territory jobs: In seasonally adjusted terms, the largest increase in employment was in Victoria (up 26,400 persons), followed by Tasmania (up 800 persons) and Western Australia (up 700 persons). The largest decrease was in New South Wales (down 6,500 persons), followed by South Australia (down 6,100) and Queensland (down 1,600 persons).
- Air traffic: According to the Bureau of Infrastructure, Transport and Regional Economics (BITRE) there were 4.72 million passengers carried on Australian domestic commercial aviation (including charter operations) in February 2018, an increase of 3.9 per cent on February 2017.
A raft of companies is affected by the employment data but especially those dependent on consumer spending. Amongst stocks affected are Fairfax, West Australian Newspapers, Seek Limited, McMillan Shakespeare and Skilled Group. Aviation activity data is important for airlines and hotels.
What does it all mean?
- There are lies, damned lies and then there are statistics. Previously, the Bureau of Statistics said that 17,500 jobs were created in February. Now the data shows a 6,300 loss of jobs. On the back of this, jobs only rose by 4,900 in March. At face value there has been a slowdown in employment. But the revisions to past data and volatility in state jobless rates in the latest month mean that we need to be careful about interpreting the latest data.
- Just as the latest employment figures were revised down, previous data was revised up. In fact now figures show that job creation in the year to January was the highest in history with employment up 431,000 over the period. That pace of job creation was unsustainable.
- Jobless rates have swung sharply across states between February and March. If the figures were taken literally, the Western Australian jobless rate soared from 6.1 per cent to 6.9 per cent while the Victorian jobless rate fell from 5.7 per cent to a 6-year low of 5.2 per cent. Data can be volatile over March and April due to the timing of Easter.
- The good news is that job creation remains healthy with the trend data providing the best guide. In trend terms the participation rate is at record highs, job creation was 14,000 in March and the jobless rate stands at 5.6 per cent. The economy doesn’t move at a consistent rate over time and the trend data is useful to iron out the volatility from month-to-month.
- The other good news is that young workers are again looking for work. The participation rate for 15-24 year old Aussies is now at 6-year highs. Only a few years ago the participation rate was at record lows. Confidence would be a key factor – younger workers now hold out hope of snaring a position.
- Clearly there is no pressing need for the Reserve Bank to change interest rate settings in any direction. The economy doesn’t need speeding up or slowing down. But the chances of a rate change in 2018 have clearly receded.
What do the figures show?
Labour market
- Employment rose by 4,900 in March after a 6,300 fall in jobs in February (previously reported as a rise of 17,500 jobs). Full-time jobs fell by 19,900 while part-time jobs rose by 24,800. Economists had tipped an increase in total jobs of around 20,000.
- Hours worked rose by 0.3 per cent in March and were up by 3.2 per cent over the year. Trend hours worked were flat in March and are up 2.6 per cent over the year.
- The unemployment rate was steady at 5.5 per cent. The participation rate eased from 65.6 per cent to 65.5 per cent.
- Unemployment across states and territories in March: NSW 5.0 per cent (February 4.8 per cent); Victoria 5.2 per cent (5.7 per cent); Queensland 6.0 per cent (6.2 per cent); South Australia 5.6 per cent (6.2 per cent); Western Australia 6.9 per cent (6.1 per cent); Tasmania 6.1 per cent (6.0 per cent). In trend terms unemployment in the Northern Territory fell from 4.0 per cent to 3.9 per cent; ACT unemployment was steady at 4.1 per cent.
- State/territory jobs: In seasonally adjusted terms, the largest increase in employment was in Victoria (up 26,400 persons), followed by Tasmania (up 800 persons) and Western Australia (up 700 persons). The largest decrease was in New South Wales (down 6,500 persons), followed by South Australia (down 6,100) and Queensland (down 1,600 persons). In trend terms jobs fell by 400 in the ACT but rose by 600 in the Northern Territory.
- The working age population rose by 32,900 in March or 1.64 per cent to 20.16 million. Over the year the working age population rose by 325,500, just off the biggest increase in five years.
Air traffic
- According to the Bureau of Infrastructure, Transport and Regional Economics (BITRE) there were 4.72 million passengers carried on Australian domestic commercial aviation (including charter operations) in February 2018, an increase of 3.9 per cent on February 2017. For the month of February 2018 there were 52 067 aircraft trips, a decrease of 0.9 per cent compared to February 2017.
- There were 4.53 million passengers were carried on Regular Public Transport (RPT) flights in February 2018, an increase of 4.1 per cent on February 2017. For the year ending February 2018 there were 60.26 million RPT passengers, an increase of 2.1 per cent on the year ending February 2017.
- RPT revenue passenger kilometres (RPKs) performed were 5.13 billion for the month, up 4.0 per cent compared with February 2017. Capacity, measured by available seat kilometres (ASKs), increased by 0.3 per cent compared with February 2017 to a total of 6.58 billion.
- With RPT passenger traffic increasing at faster rate than capacity, the industry wide load factor (RPKs/ASKs) increased from 75.3 per cent in February 2017 to 78.0 per cent in February 2018.
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.
- The Bureau of Infrastructure, Transport and Regional Economics (BITRE) releases data on domestic aviation each month. The data is useful in tracking consumer spending and airline performance.
What are the implications?
- The outlook for the job market remains positive. Data out yesterday showed job vacancies at 5½-year highs and they continue to lift. In addition businesses surveys suggest operating conditions are around the best levels in 20 years.’
- The softening of the job market in February and March looks like the pause that refreshes. Jobs soared in the second half of 2017, lifting at an unsustainable pace. But averaging out the bumps, trend employment is still rising – in fact it hasn’t fallen for over four years.
- Competition in the job market has increased. Mothers, seniors and young people are all looking for work. Opportunities are available and increased employment is positive for retailers.
- CommSec expects official interest rates to remain solidly on hold for at least the next six months.