How are Australia’s states and territories performing?

• Each quarter CommSec attempts to find out which state or territory is Australia’s economic leader. Now in its 17th year, the report also includes a section comparing annual growth rates for the eight key indicators across the states and territories as well as Australia as a whole, enabling comparisons in terms of economic momentum.
• Overall, the economic performances of Australian states and territories are being supported by a combination of slowing inflation, a reduction in borrowing costs, rising real wages, increasing home prices, robust government spending, a pickup in housing investment and a solid labour market.
• While private sector activity is improving, business investment remains subdued, job growth is slowing, and weaker public sector activity could eventually push up unemployment and slow wages growth. The future path will depend on the resiliency of the labour market, further interest rate cuts and global trade policies.
• Western Australia leads the national performance rankings for the fifth successive report. The state is ranked first on four of the eight economic indicators.
• Queensland has climbed to second from third place driven by a rebound in household spending. South Australia slips to third, but the Northern Territory jumps to fourth from eighth, its highest position since October 2016, supported by solid domestic spending.
• Victoria slips back to fifth from fourth spot, Tasmania drops from fifth to sixth place, NSW dips from equal sixth to seventh, with the ACT now in eighth place.
• Accounting for the eight annual indicators, Western Australia remains in first place, just ahead of South Australia in second and the Northern Territory in third. Queensland stays in fourth spot, followed by NSW (fifth), Victoria (sixth), the ACT (seventh) and Tasmania (eighth).

Analysis

Where to from here?

• Despite a challenging global economic and geopolitical backdrop, stabilising exports, ongoing government support and solid growth in household consumption are expected to drive activity in the resources-led economies of Western Australia, Queensland and the Northern Territory in 2026.
• Consumer spending in NSW, Victoria and the ACT is expected to recover following recent interest rate reductions, but business investment remains weak. Housing construction activity poses an ongoing challenge for both NSW and the ACT amid affordability and supply constraints. The transition from public to private sector-led growth has begun in the bigger states. That said, slowing public demand is expected to continue to weigh on the nation’s capital.
• The Tasmanian economy is awaiting a much-needed housing recovery and rebound in exports amid weakness in both private and public sector investment. A modest outlook for private sector demand remains a challenge. Continuing growth in the private sector alongside a pickup in public demand should support the South Australian economy into the new year.

Methodology

• Each of the state and territory economies were assessed on eight key indicators: economic growth; household spending; equipment investment; unemployment, construction work done; population growth; housing finance and dwelling commencements.
• The aim is to find how each economy is performing compared with ‘normal’. Similar to what the Reserve Bank does with interest rates, we used decade averages to judge the ‘normal’ state of affairs. For each economy, the latest level of the indicator—such as household spending or economic growth—was compared with the decade average.
• While we also looked at the current pace of growth to assess economic momentum, it may yield perverse results to judge performance. For instance, household spending may be up sharply on a year ago but from depressed levels. Overall spending may still be well below ‘normal’.
• And clearly some states, such as Queensland and Western Australia, traditionally have had faster economic growth rates due to historically faster population growth. So, the best way to assess economic performance is to look at each indicator in relation to what would be considered ‘normal’ for that state or territory.
• For instance, the trend jobless rates in Queensland and Western Australia stood at 4.2 per cent and 4.1 per cent, respectively, in September 2025. But the Queensland unemployment rate was 20.7 per cent below its decade average of 5.3 per cent, while the Western Australian jobless rate of 4.1 per cent was 18.9 per cent below its decade average of 5.1 per cent. So, Queensland ranks above Western Australia on this indicator.
• Seasonally adjusted or trend measures of the economic indicators were used to assess performance on all measures. The preference was for the less volatile trend measures. Original data is used to assess population growth.
• We now measure economic growth using real state demand plus real net trade in goods and services in seasonally adjusted terms. While the data only extends back over five years, the results can be consistently compared for all economies in real terms.

 Read the report.

The post CommSec State of the States: State and Territory Economic Performance Report, October 2025 appeared first on AdviserVoice.

How are Australia’s states and territories performing?

• Each quarter CommSec attempts to find out which state or territory is Australia’s economic leader. Now in its 16^th year, the report also includes a section comparing annual growth rates for the eight key indicators across the states and territories as well as Australia as a whole, enabling comparisons in terms of economic momentum.
• Overall, the economic performances of Australian states and territories are being supported by a strong job market, robust government spending and solid population growth at a time of higher-than-desired cost-of-living pressures. But economic growth has slowed, with consumers squeezed by elevated mortgage costs. The future path will depend on the resiliency of the job market, expected interest rate cuts, the federal election outcome and China’s demand for commodities in the face of rising US import tariffs.
• Western Australia leads the national performance rankings for the third successive report. The state is ranked first on five of the eight economic indicators.
• In a closely fought contest, Victoria jumps up to second place from fourth spot. Queensland slips from second to third spot, just ahead of South Australia now in fourth, also dropping from equal second spot.
• Tasmania is steady in fifth place but is joined by NSW, which lifts from sixth spot. The ACT remains seventh.
• The Northern Territory stays in eighth spot. We acknowledge that the economic performance ranking criteria disadvantages this small, open economy. As a result, we highlight the annual growth rankings—a measure of economic momentum.
• Measuring annual growth rates of the eight economic indicators Western Australia replaces Queensland in first spot, which slips back to second. Victoria remains third and South Australia stays fourth. The Northern Territory remains fifth ahead of NSW in sixth and Tasmania in seventh. The ACT slips to eighth spot.

Analysis

Where to from here?

• Last quarter (January 2025, Edition 62) we noted that Western Australia and Queensland were expected to continue their recent domination of the rankings in early 2025. While Western Australia tightened its grip atop the national economic leaderboard, both Queensland and South Australia slipped back from joint second to third and fourth places, respectively, losing some momentum. The pace of gains in the states home prices are slowing following a strong post-pandemic upswing.
• Victoria is the biggest surprise, jumping from fourth to second spot. The southern state continues to benefit from solid retail spending and inbound overseas migration.
• Looking ahead, an expected reduction in interest rates could boost economic sentiment in the mortgage-sensitive states of NSW and Victoria. Federal election uncertainties and a potential public service downsize pose a downside risk to the ACT economy. The escalating US-China trade war could dampen growth in Western Australia, Queensland and the Northern Territory due to their reliance on Chinese demand for commodity exports.

Methodology

• Each of the state and territory economies were assessed on eight key indicators: economic growth; retail spending; equipment investment; unemployment, construction work done; population growth; housing finance and dwelling commencements.
• The aim is to find how each economy is performing compared with ‘normal’. Similar to what the Reserve Bank of Australia (RBA) does with interest rates, we used decade averages to judge the ‘normal’ state of affairs. For each economy, the latest level of the indicator—such as retail spending or economic growth—was compared with the decade average.
• While we also looked at the current pace of growth to assess economic momentum, it may yield perverse results to judge performance. For instance, retail spending may be up sharply on a year ago but from depressed levels. Overall spending may still be well below ‘normal’.
• And clearly some states, such as Queensland and Western Australia, traditionally have had faster economic growth rates due to historically faster population growth. So the best way to assess economic performance is to look at each indicator in relation to what would be considered ‘normal’ for that state or territory.
• For instance, the trend jobless rates in South Australia and Tasmania both stood at 3.9 per cent in March 2025. But the Tasmanian unemployment rate was 28.8 per cent below its decade average of 5.5 per cent, while the South Australian jobless rate of 3.9 per cent was 31.0 per cent below its decade average of 5.7 per cent. So South Australia ranks above Tasmania on this indicator.
• Seasonally adjusted or trend measures of the economic indicators were used to assess performance on all measures. The preference was for the less volatile trend measures. Original data is used to assess population growth.
• We now measure economic growth using real state demand plus real net trade in goods and services in seasonally adjusted terms. While the data only extends back four years, the results can be consistently compared for all economies in real terms.

Read the report.

The post CommSec State of the States: State and Territory Economic Performance Report, April 2025 appeared first on AdviserVoice.

How are Australia’s states and territories performing?

• Each quarter CommSec attempts to find out which state or territory is Australia’s economic leader. Now in its 16^th year, the report also includes a section comparing annual growth rates for the eight key indicators across the states and territories as well as Australia as a whole, enabling comparisons in terms of economic momentum.
• Overall, the economic performances of Australian states and territories are being supported by a strong job market and solid population growth at a time of higher-than-desired price inflation.
• Australia’s state and territory economies have slowed as consumers respond to higher borrowing costs and price pressures. The future path will depend on the resiliency of the job market and interest rates.
• Western Australia leads the national performance rankings for the second time in a decade. The state is ranked first on five of the eight economic indicators, when compared with the decade average.
• In a closely fought contest, Queensland moves up from third spot, joining South Australia in second spot. Victoria remains in fourth place, with Tasmania steady in fifth place.
• NSW leapfrogs the ACT into sixth from seventh place, with the nation’s capital dipping down to second last.
• The Northern Territory remains in eighth spot. We acknowledge that the economic performance ranking criteria disadvantages this small, open economy. As a result, we highlight the annual growth rankings—a measure of economic momentum.
• Measuring annual growth rates of the eight economic indicators, Queensland replaces Western Australia in first spot, which slips back to second. Victoria climbs to third and South Australia is fourth. The Northern Territory is now fifth ahead of both the ACT and NSW in joint sixth. Tasmania now sits in eighth place.

Analysis

Where to from here?

• Last quarter (October 2024, edition 61) we noted that Western Australia would likely consolidate its position atop the leaderboard given its strong economic performance. We also said South Australia’s economy had lost some momentum, but alongside the fast-improving Queensland economy, would remain near the top.
• While Queensland moved up the leaderboard, as expected, the interest-rate sensitive south-eastern states and territories remained in a tight cluster mid-table. NSW displaced the ACT in sixth spot. The ACT, Northern Territory and Tasmania are all struggling with slower relative population growth rates.
• Looking ahead, Western Australia and Queensland are expected to continue their recent domination of the rankings in early 2025. Queensland was ranked first in January 2023.

Methodology

• Each of the state and territory economies were assessed on eight key indicators: economic growth; retail spending; equipment investment; unemployment, construction work done; population growth; housing finance and dwelling commencements or starts.
• The aim is to find how each economy is performing compared with ‘normal’. Similar to what the Reserve Bank does with interest rates, we used decade averages to judge the ‘normal’ state of affairs. For each economy, the latest level of the indicator—such as retail spending or economic growth—was compared with the decade average.
• While we also looked at the current pace of growth to assess economic momentum, it may yield perverse results to judge performance. For instance, retail spending may be up sharply on a year ago but from depressed levels. Overall spending may still be well below ‘normal’.
• And clearly some states, such as Queensland and Western Australia, traditionally have had faster economic growth rates due to historically faster population growth. So the best way to assess economic performance is to look at each indicator in relation to what would be considered ‘normal’ for that state or territory.
• For instance, the trend jobless rate in NSW stood at 3.8 per cent in December 2024. But the NSW unemployment rate was 19.1 per cent below its decade average, while the South Australian jobless rate of 4.0 per cent was 30.2 per cent below its decade average. So South Australia ranks above NSW on this indicator.
• Seasonally adjusted or trend measures of the economic indicators were used to assess performance on all measures. The preference was for the less volatile trend measures. Original data is used to assess population growth.
• We now measure economic growth using real state demand plus real net trade in goods and services in seasonally adjusted terms. While the data only extends back four years, the results can be consistently compared for all economies in real terms.

Read the report.

The post CommSec State of the States: State and Territory Economic Performance Report, January 2025 appeared first on AdviserVoice.

How are Australia’s states and territories performing?

• Each quarter CommSec attempts to find out which state or territory is Australia’s economic leader. Now in its 16^th year, the report also includes a section comparing annual growth rates for the eight key indicators across the states and territories as well as Australia as a whole, enabling comparisons in terms of economic momentum.
• Overall, the economic performances of Australian states and territories are being supported by a solid job market and strong population growth at a time of higher-than-desired price inflation.
• Australia’s state and territory economies have slowed as consumers respond to higher borrowing costs and price pressures. The future path will depend on the resiliency of the job market and interest rates.
• Western Australia now leads the national performance rankings for the first time in a decade. The state is ranked first on three of the eight indicators. In a closely fought contest, South Australia slips to second spot.
• The big mover is Queensland, which jumps up to third from fifth place. Victoria slips off the podium to fourth from third place, with Tasmania inching up to fifth from sixth spot.
• The ACT has tumbled to sixth place from fourth, followed by NSW, which is still in seventh place.
• The Northern Territory remains in eighth spot. We acknowledge that the economic performance ranking criteria disadvantages this small, open economy. As a result, we highlight the annual growth rankings—a measure of economic momentum.
• Measuring annual growth rates of the eight economic indicators, Western Australia is now alone in first spot. Queensland is second, the Northern Territory is third and the ACT is fourth. Tasmania stays fifth ahead of South Australia in sixth spot, followed by Victoria and NSW in seventh and eighth spots, respectively.

Analysis

Where to from here?

• Last quarter we noted that Western Australia was in prime position to take over from South Australia in first place. We also said Victoria, Queensland and the ACT were all in striking distance of top spot too with solid annual growth rates.
• While Western Australia and Queensland moved up the leaderboard, as expected, Victoria and the ACT lost some momentum and are now ranked mid-table in a tight cluster with Tasmania.
• Looking ahead, Western Australia could consolidate its position atop the leaderboard given its strong recent economic performance.
• South Australia’s economy has lost some momentum recently, but alongside the fast-improving Queensland economy, remains in striking distance of top spot.

Methodology

• Each of the state and territory economies were assessed on eight key indicators: economic growth; retail spending; equipment investment; unemployment, construction work done; population growth; housing finance and dwelling commencements.
• The aim is to find how each economy is performing compared with ‘normal’. Similar to what the Reserve Bank does with interest rates, we used decade averages to judge the ‘normal’ state of affairs. For each economy, the latest level of the indicator—such as retail spending or economic growth—was compared with the decade average.
• While we also looked at the current pace of growth to assess economic momentum, it may yield perverse results to judge performance. For instance, retail spending may be up sharply on a year ago but from depressed levels. Overall spending may still be well below ‘normal’.
• And clearly some states, such as Queensland and Western Australia, traditionally have had faster economic growth rates due to historically faster population growth. So the best way to assess economic performance is to look at each indicator in relation to what would be considered ‘normal’ for that state or territory.
• For instance, the trend jobless rate in NSW stood at 3.9 per cent in September 2024. But the NSW unemployment rate was 17.9 per cent below its decade average, while the South Australian jobless rate of 4.2 per cent was 27.6 per cent below its decade average. So South Australia ranks above NSW on this indicator.
• Seasonally adjusted or trend measures of the economic indicators were used to assess performance on all measures. The preference was for the less volatile trend measures. Original data is used to assess population growth.
• We now measure economic growth using real state demand plus real net trade in goods and services in seasonally adjusted terms. While the data only extends back four years, the results can be consistently compared for all economies in real terms.

Read the report.

The post CommSec State of the States, October 2024 appeared first on AdviserVoice.

• How are Australia’s states and territories performing?
• Each quarter CommSec attempts to find out which state or territory is Australia’s economic leader. Now in its 15th year, the report also includes a section comparing annual growth rates for the eight key indicators across the states and territories as well as Australia as a whole, enabling comparisons in terms of economic momentum.
• Overall, the economic performances of Australian states and territories are being supported by a solid job market and strong population growth at a time of rising interest rates.
• Australia’s state and territory economies have slowed in response to higher borrowing costs and price pressures. The future path will depend on the response of inflation to higher interest rates.
• Australia’s state and territory economies have slowed as consumers respond to higher borrowing costs and price pressures. The future path will depend on the resiliency of the job market and interest rates.
• And while it was close, South Australia has gone back-to-back to lead the performance rankings. South Australia ranked first on four of the eight indicators.
• Western Australia is now ranked second with Victoria in third position.
• NSW, Queensland, the ACT and Tasmania couldn’t be split for fourth position. And the Northern Territory is eighth.
• We acknowledge that the economic performance ranking criteria disadvantages the small, open economy of the Northern Territory. As a result we highlight the annual growth rankings—a measure of economic momentum.
• Measuring annual growth rates of the eight economic indicators, Western Australia is in first spot ahead of Queensland. Victoria is third and the ACT is fourth. NSW is fifth ahead of South Australia in sixth spot followed by the Northern Territory and Tasmania in seventh and eighth spots respectively..

Analysis

• Last quarter we noted that South Australia, NSW and Victoria “are most likely to challenge for top spot”. While we were right about South Australia, Western Australia was the surprise, up from fourth to second.
• Western Australia gained ground in five indicators, especially economic growth.
• Looking ahead, South Australia, Western Australia and Victoria could conceivably take top spot in the next quarterly survey.  But apart from the Northern Territory, none of the other states and territory can be ruled out given solid population growth and firm job markets.
  

Methodology

• Each of the states and territory economies were assessed on eight key indicators: economic growth; retail spending; equipment investment; unemployment, construction work done; population growth; housing finance and dwelling commencements.
• The aim is to find how each economy is performing compared with ‘normal’. And just like the Reserve Bank does with interest rates, we used decade-averages to judge the ‘normal’ state of affairs. For each economy, the latest level of the indicator – such as retail spending or economic growth – was compared with the decade average.
• While we also looked at the current pace of growth to assess economic momentum, it may yield perverse results to judge performance. For instance retail spending may be up sharply on a year ago but from depressed levels. Overall spending may still be well below ‘normal’. And clearly some states such as Queensland and Western Australia traditionally have had faster economic growth rates due to historically faster population growth. So the best way to assess economic performance is to look at each indicator in relation to what would be considered ‘normal’ for that state or territory.
• For instance, the trend jobless rate in NSW stood at 3.7 per cent in March 2024. But the NSW unemployment rate was 23.5 per cent below its decade average, while the South Australian jobless rate of 3.8 per cent was 35.8 per cent below its decade average. So South Australia ranks above NSW on this indicator.
• Seasonally adjusted or trend measures of the economic indicators were used to assess performance on all measures. The preference was for the less volatile trend measures. Original data is used to assess population growth.

The post CommSec State of the States: April 2024 appeared first on AdviserVoice.

• How are Australia’s states and territories performing?
• Each quarter CommSec attempts to find out which state or territory is Australia’s economic leader. Now in its 15th year, the report also includes a section comparing annual growth rates for the eight key indicators across the states and territories as well as Australia as a whole, enabling comparisons in terms of economic momentum.
• Overall, the economic performances of Australian states and territories are being supported by a solid job market and strong population growth at a time of rising interest rates.
• Australia’s state and territory economies have slowed in response to higher borrowing costs and price pressures. The future path will depend on the response of inflation to higher interest rates.
• For the first time in the 14 years of our quarterly reports, South Australia is on top of the leader board. South Australia ranked first on four of the eight indicators.
• Victoria is now ranked equal second with NSW. Western Australia ranks fourth ahead of Tasmania in fifth spot. The ACT is sixth, ahead of Queensland in seventh spot and the Northern Territory in eighth.
• South Australia ranks first on relative economic growth, relative unemployment, construction work done and dwelling starts.
• Victoria is now in equal second position with NSW and Western Australia is fourth.
• Victoria ranks second on retail trade. NSW ranks second on relative economic growth and construction work done. Western Australia ranks first on relative population growth.
• Behind Western Australia is Tasmania in fifth spot. The ACT is sixth and Queensland is seventh on the economic performance table.
• And the Northern Territory sits in eighth position.
• We acknowledge that the economic performance ranking criteria disadvantages the small, open economy of the Northern Territory. As a result we highlight the annual growth rankings—a measure of economic momentum.
• Measuring annual growth rates of the eight economic indicators, Western Australia is in first spot ahead of Queensland. Victoria is third and NSW is fourth. South Australia is fifth ahead of the Northern Territory in sixth spot followed by the ACT and Tasmania in seventh and eighth spots respectively.
• Western Australia leads other states and territories on annual growth rates on three of the eight indicators. The Northern Territory leads on two indicators. And Queensland, South Australia and the ACT lead on one indicator.

Analysis

• Last quarter we noted that Victoria would face challenges for first position from four other economies. This proved correct with South Australia lifting from second position to first.
• South Australia gained significant ground in construction-related sectors as well as overall economic growth.
• Looking ahead, trends in jobs, consumer spending and housing will be important with Queensland, NSW and Western Australia possessing firm momentum.
• Seven of the eight states and territories could conceivably take top spot in the next quarterly survey but South Australia, NSW and Victoria are most likely to challenge for top spot.

Methodology

• Each of the states and territory economies were assessed on eight key indicators: economic growth; retail spending; equipment investment; unemployment, construction work done; population growth; housing finance and dwelling commencements.
• The aim is to find how each economy is performing compared with ‘normal’. And just like the Reserve Bank does with interest rates, we used decade-averages to judge the ‘normal’ state of affairs. For each economy, the latest level of the indicator – such as retail spending or economic growth – was compared with the decade average.
• While we also looked at the current pace of growth to assess economic momentum, it may yield perverse results to judge performance. For instance retail spending may be up sharply on a year ago but from depressed levels. Overall spending may still be well below ‘normal’. And clearly some states such as Queensland and Western Australia traditionally have had faster economic growth rates due to historically faster population growth. So the best way to assess economic performance is to look at each indicator in relation to what would be considered ‘normal’ for that state or territory.
• For instance, the trend jobless rates in NSW stood at 3.4 per cent in December. But the NSW unemployment rate was 30.1 per cent below its decade average, while the South Australian jobless rate of 3.8 per cent was 36.5 per cent below its decade average. So South Australia ranks above NSW on this indicator.
• Seasonally adjusted or trend measures of the economic indicators were used to assess performance on all measures. The preference was for the less volatile trend measures. Original data is used to assess population growth.

Read the report.

The post CommSec State of the States – January 2024 appeared first on AdviserVoice.

Ryan Felsman

Labour force – October 2023

• The unemployment rate ticked up to 3.7% in October, reversing the dip down in September.
• Employment rose by 55k in October, driven by a 37.9k increase in part‑time employment.
• Growth in hours worked slowed further to 1.7%/yr, and trend‑adjusted hours worked has declined over H2 23.

The labour market remains tight but there are pockets of cooling

The October labour force survey showed a tick up in the unemployment rate to 3.7%.  That was in line with our estimate and also the market consensus.  It follows the temporary dip to 3.6% in September and is unchanged from the unemployment rate figure in July and August.

The seasonally adjusted unemployment rate has bounced around over recent months.  The trend unemployment rate, as shown in the facing chart, showed that there has been a clear pick‑up in the upward trajectory since its trough in October last year.  However, the unemployment rate remains much lower than implied by its historical relationships with other labour market indicators such as surveyed measures of unemployment expectations and job ads.

The underemployment rate was unchanged at 6.3%.  It stands well above the trough of 5.8% seen in February, but has been little changed over the second half of this year.

The October figures also showed a bounce in employment, with a 37.9k increase in part‑time employment and a smaller 17.0k increase in full‑time employment.  The 55k lift in employment follows the modest 7.8k (revised from 6.7k) increase in September and 70.3k (revised from 63.3k) in August.

There has been a clear shift in recent months in the main driver of employment growth, as the facing chart shows.  Employment growth over 2022 had been characterised by big lifts in full‑time employment.  More recently, that has shifted to part‑time jobs growth.  Over the past four months, part‑time employment has increased by 3.9%.  Over the same period, full‑time employment has decreased by 0.3%.

Hours worked rose by 0.5% in the month and just 1.7% over the year to October.  Trend‑adjusted hours worked has been declining since July.  The 1.7%/yr lift in hours worked compares with the 3.0%/yr increase in employment.  The stronger pace of jobs growth lines up with the relative strength in part‑time jobs and also the faster pick‑up in underemployment.  This switch though could be seen as a sign of cooling in the labour market.

The participation rate rose back to a record high 67.0%.  That reverses the tick down we saw in September.  The working age population continued to increase further, up by 55.2k in the month.  The working age population is now up by 2.9% over the year to October.

As had been flagged in an earlier ABS release, this month’s labour force report was influenced by the Aboriginal and Torres Strait Islander Voice referendum.  The referendum was held on 14 October, and the survey’s reference period was from 1‑14 October.  The ABS noted that the referendum had a temporary effect on employment, hours and participation in October.  Given that, we could expect some payback next month, perhaps more so in employment, given that was stronger than expected.  However, the ABS stated that the temporary impact of the referendum cannot be quantified.

The cohort details in the survey added to the weight of evidence that the labour market is cooling.  In particular, the youth unemployment rate rose further in October, to 9.2%, the highest since late 2021 (see facing chart).  These figures can be volatile month‑to‑month, but the trend youth unemployment rate has increased by 1 percentage point, up from 7.7% a year ago to 8.7%.

By state, WA saw the largest tick up in unemployment (+0.5ppts to 3.8%).  Qld (+0.4ppts to 4.3%) and Vic (+0.3ppts to 3.8%) also saw increases.  There were more modest changes in NSW (+0.1ppts to 3.4%) and SA (‑0.1ppts to 3.6%).

Last week’s labour force survey follows on from yesterday’s Wage Price Index data, covered by my colleague Belinda Allen. We would view both the wages and jobs numbers as broadly in line with the RBA’s forecasts.  As such, the RBA will be focusing on the inflation data ahead of the December Board meeting.  The October CPI indicator (due out 29/11) will be the one to watch.

What does it mean for investors?

Aussie employment jumped in October, after modest gains in September, though the unemployment rate still ticked higher as more people went looking for work and strong inbound migration boosted the supply of workers. The economy added 55,000 jobs in October, more than double economists’ forecasts of 24,000.

But the hiring frenzy was driven primarily by part-time jobs – which surged by 37,900 positions – in October. The tilt towards part-time job hiring – with 161,500 positions added in the past four months – suggests that employers are becoming more cautious about hiring permanent workers amid a jump in borrowing costs and slowing consumer demand. That said, the lift in part-time staff may also reflect hiring for the Australian Indigenous Voice referendum that was conducted on October 14.

The number of full-time positions rose by 17,100 last month, but a net 29,800 full-time jobs have been shed since June.

Australia’s unemployment rate rose from 3.55% in September to 3.72% in October, the highest level since July. The jobless rate has hovered between the range of 3.4% – 3.7% since June last year, near 50-year lows.

Higher unemployment was driven by more people looking for work, with the participation rate increasing from 66.8% in September to a record high 67% in October.

Record inflows of overseas migrants and international students have boosted the supply of labour to meet demand, with population growth up by 55,200 people. So while employment growth was solid at 55,000 in October, Australia’s labour force expanded by an even larger 83,000 people.

Monthly hours worked in all jobs rose by 0.5% to 1,939.4 million hours. Hours worked are up 1.7% on a year ago, but down from 5% in the middle of this year. Last month, hours worked lifted 2.1% in Queensland but fell 3.8% in Tasmania. “The recent slowdown in the growth of hours worked may suggest that the labour market is starting to slow, following a particularly strong period of growth,” said Bjorn Jarvis, the Bureau of Statistics head of labour statistics.

The labour market remains tight, though measures of spare capacity continue to edge higher from October 2022 cycle lows. Australia’s underemployment rate remained at 6.3% in October. The underutilisation rate, which combines the unemployment and underemployment rates, rose 0.1 percentage points to 10%.

The jobless rate in NSW is the lowest across Australia at 3.4% in October, with 20,100 jobs added in the month. Victoria gained 34,400 jobs last month but the jobless rate crept up to 3.8%. Queensland added 10,600 positions with the jobless rate at 4.3%. And Western Australia gained 9,500 jobs with the unemployment rate higher at 3.8%. Increases were more modest elsewhere.

Forward-looking indicators of jobs growth have begun to moderate. In fact, Jobs & Skills Australia yesterday reported that national online job advertisements fell by 3.8% or 10,380 job advertisements to stand at 261,174 in October. Ads are down by 9.1% or 26,235 available positions on a year ago. SEEK job ads were reported down 5% last month, and 19.9% lower on a year ago, while applications per job ad are up 4.1%.

There was little market reaction to the data showing that Australian employment had beat economists’ forecasts with a rise of 55,000 in October, though that was balanced by a lift in the unemployment rate to 3.7%.

The higher jobless rate may also soothe the Reserve Bank’s (RBA) concerns over solid wage inflation. RBA Governor Michele Bullock recently described the labour market as “not as tight as it was”, noting that some leading indicators such as job vacancies have begun to ease from high levels.

And with record migration helping meet the demand for labour, traders doubt the RBA will hike interest rates again in the near term, following last week’s quarter point lift to 4.35%. Futures imply only a 7% chance of another rise in December. That said, money markets still see a 60% chance of another hike to 4.60% in the first half of next year, with low unemployment likely to keep wages growth elevated. The next key data point will be the monthly consumer price index (CPI) indicator released on November 29.

The Aussie dollar (AUD) edged higher from US65.04 cents to US65.16 cents immediately following the release of the job report, but the AUD has since slipped to around US64.60 cents.

The interest-rate sensitive Australian 3-year government bond yield rose from 4.197% to 4.206% following the labour force survey, but has since eased to near 4.178%.

The S&P/ASX 200 index traded slightly lower at the open, before losing momentum over Thursday’s trading session, as investors evaluated Wednesday’s strong wages data against today’s mixed jobs report.

The initial response to the Aussie jobs report was muted, but news that Chinese home prices fell by the most in eight years in October, weighed on risk sentiment. At the time of writing, the ASX 200 index was down around 40 points or 0.6% to near 7,065 points, with rate-sensitive technology and real estate shares down 0.9% each.

By Ryan Felsman

The post CBA/CommSec Economics: Update – Unemployment rate ticks back up to 3.7% appeared first on AdviserVoice.

• How are Australia’s states and territories performing?
• Each quarter CommSec attempts to find out which state or territory is Australia’s economic leader. Now in its 15th year, the report also includes a section comparing annual growth rates for the eight key indicators across the states and territories as well as Australia as a whole, enabling comparisons in terms of economic momentum.
• Overall, the economic performances of Australian states and territories are being supported by a solid job market and strong population growth at a time of rising interest rates.
• Australia’s state and territory economies are slowing in response to higher borrowing costs and price pressures. The future path of economies will depend on the response of inflation to higher interest rates.
• In the latest survey there is little to separate six of the state and territory economies. Victoria has surprised, jumping from fifth to first position. Victoria was consistently firm across all the indicators, improving its ranking on four of the eight indicators.
• South Australia is now in second position, ahead of NSW and Queensland.
• South Australia ranks first on relative unemployment. NSW ranks second or third on four indicators. Queensland ranks first on home lending.
• Behind Queensland is Western Australia, remaining in fifth position, ahead of Tasmania. There is little to separate the top six economies.
• The ACT is ranked seventh ahead of the Northern Territory.
• We acknowledge that the decade-average method disadvantages the Northern Territory. Significant LNG construction over 2012–18 inflated a range of economic indicators. So we highlight rankings of economic momentum—that is, the annual growth rates for the eight indicators.
• Western Australia now heads the leader-board of annual growth rates, ahead of NSW, Victoria and Queensland in joint third position.South Australia is fifth; the ACT is sixth. Then the Northern Territory is seventh, ahead of Tasmania.
• Western Australia leads other states and territories on annual growth rates for three of the eight indicators.
• NSW, South Australia, the Northern Territory, Queensland and the ACT all lead on one indicator.. .

Analysis

• While Victoria now claims first position on overall economic performance, it faces challenges from four other economies. Even Western Australia could post a challenge to Victoria, given its current momentum.
• However, Victoria was consistent in the latest survey – first, second or third on five of the eight indicators.
• Looking ahead, trends in consumer spending and migration are important to watch as well as the US and Chinese economies.
• Success achieved in lowering inflation expectations, balancing supply and demand, and thus reducing the rate of inflation will determine the path of interest rates and economic activity across all states and territories.

Methodology

• Each of the states and territory economies were assessed on eight key indicators: economic growth; retail spending; equipment investment; unemployment, construction work done; population growth; housing finance and dwelling commencements.
• The aim is to find how each economy is performing compared with ‘normal’. And just like the Reserve Bank does with interest rates, we used decade-averages to judge the ‘normal’ state of affairs. For each economy, the latest level of the indicator – such as retail spending or economic growth – was compared with the decade average.
• While we also looked at the current pace of growth to assess economic momentum, it may yield perverse results to judge performance. For instance retail spending may be up sharply on a year ago but from depressed levels. Overall spending may still be well below ‘normal’. And clearly some states such as Queensland and Western Australia traditionally have had faster economic growth rates due to historically faster population growth. So the best way to assess economic performance is to look at each indicator in relation to what would be considered ‘normal’ for that state or territory.
• For instance, the trend jobless rates in NSW stood at 3.3 per cent in September. However, the NSW unemployment rate was 32.9 per cent below its decade average, while the South Australian jobless rate of a record low 3.7 percent was 38.9 per cent below its decade average. So South Australia ranks above NSW on this indicator.
• Seasonally adjusted or trend measures of the economic indicators were used to assess performance on all measures. The preference was for the less volatile trend measures. Original data is used to assess population growth.

Read the report.

The post CommSec State of the States – October 2023 appeared first on AdviserVoice.

• How are Australia’s states and territories performing?
• Each quarter CommSec attempts to find out which state or territory is Australia’s economic leader. Now in its 14th year, the report also includes a section comparing annual growth rates for the eight key indicators across the states and territories as well as Australia as a whole, enabling comparisons in terms of economic momentum.
• Overall, the economic performances of Australian states and territories are being supported by a solid job market and strong population growth at a time of rising interest rates.
• But Australia’s state and territory economies are slowing in response to higher borrowing costs and price pressures.
• The future path of economies will depend on the response of inflation to higher interest rates.
• In the latest survey there is little to separate the top four of the state and territory economies.
• Tasmania has retained top spot in the State of the States’ economic performance rankings, improving its ranking on retail spending.
• Tasmania ranks first on equipment spending and dwelling starts.
• NSW remains in second position and has narrowed the gap with Tasmania. South Australia slips to third place.
• NSW ranks first on relative unemployment. South Australia ranks first on relative population growth.
• Behind NSW and South Australia in fourth spot is Queensland. Western Australia is fifth while Victoria slips to sixth. There is little to separate the top six economies.
• The ACT is ranked seventh ahead of the Northern Territory.
• We acknowledge that the decade-average method disadvantages the Northern Territory. Significant LNG construction over 2012–18 inflated a range of economic indicators. So we highlight rankings of economic momentum—that is, the annual growth rates for the eight indicators.
• Measuring annual growth of the eight economic indicators, NSW is first, ahead of Queensland with Western Australia, Victoria and South Australia in joint third place. The ACT is sixth, ahead of the Northern Territory and Tasmania.
• There are encouraging signs for the Western Australian economy. Western Australia leads other states and territories on annual growth rates for two of the eight indicators.
• NSW, South Australia, Tasmania, the Northern Territory, Queensland and the ACT all lead on one indicator.

Analysis

• While Tasmania remains in first position, it faces challenges from NSW. And while Tasmania leads on two indicators, it ranks eighth on relative population growth—pointing to slower economic activity ahead.
• NSW is the most consistent economy, leading on relative unemployment, and second or third on four indicators.
• Looking ahead, trends in population, the job market and housing should be closely monitored. As noted in the last survey, the potential for stimulus in the Chinese economy will be important for resources and tourism-focussed states.
• But clearly, the success achieved in lowering the rate of inflation will determine the path of interest rates and economic activity across all states and territories.

Methodology

• Each of the states and territory economies were assessed on eight key indicators: economic growth; retail spending; equipment investment; unemployment, construction work done; population growth; housing finance and dwelling commencements.
• The aim is to find how each economy is performing compared with ‘normal’. And just like the Reserve Bank does with interest rates, we used decade-averages to judge the ‘normal’ state of affairs. For each economy, the latest level of the indicator – such as retail spending or economic growth – was compared with the decade average.
• While we also looked at the current pace of growth to assess economic momentum, it may yield perverse results to judge performance. For instance retail spending may be up sharply on a year ago but from depressed levels. Overall spending may still be well below ‘normal’. And clearly some states such as Queensland and Western Australia traditionally have had faster economic growth rates due to historically faster population growth. So the best way to assess economic performance is to look at each indicator in relation to what would be considered ‘normal’ for that state or territory.
• For instance, the trend jobless rates in the ACT and NSW both stood at 3.1 per cent in June. However, the NSW unemployment rate was 37.8 per cent below its decade average, while the ACT jobless rate was 19.6 per cent below its decade average. So NSW ranks above the ACT on this indicator.
• Except for economic growth, seasonally adjusted or trend measures of the economic indicators were used to assess performance on all measures. While preference was for trend measures, in many cases these have been suspended in the wake of the COVID-19 crisis. Rolling annual nominal data was used to assess economic growth.

Read the report.

The post CommSec State of the States: July 2023 appeared first on AdviserVoice.

• How are Australia’s states and territories performing?
• Each quarter CommSec attempts to find out which state or territory is Australia’s economic leader. Now in its 14th year, the report also includes a section comparing annual growth rates for the eight key indicators across the states and territories as well as Australia as a whole, enabling comparisons in terms of economic momentum.
• Overall, the economic performances of Australian states and territories are being supported by strong job and commodity markets at a time of rising interest rates.
• All states are performing well, supported by strong population growth, still-solid consumer spending, elevated commodity prices, stabilising home prices and low unemployment.
• The future path of spending, housing and job markets will determine how economies perform over the second half of 2023.
• Tasmania has regained top spot in the State of the States’ economic performance rankings, improving rankings on dwelling starts, relative unemployment and relative economic growth.
• Tasmania ranks first on equipment investment, dwelling starts and relative unemployment. And it is second on housing finance.
• Close behind in joint second position are Queensland and South Australia. Queensland finished on top in the previous survey while it is South Australia’s best ranking for just over a year.
• NSW remains in fourth position.
• Behind NSW in joint fifth are Victoria and Western Australia followed by the ACT. There is little to separate these four economies. And the Northern Territory ranks eighth.
• In terms of the leading positions on the economic indicators, as noted Tasmania leads the rankings on relative unemployment, dwelling starts and equipment investment.
• Queensland leads on relative population growth.
• The ACT leads on housing finance.
• Western Australia leads on relative economic growth.
• South Australia leads on construction work done.
• Victoria is top ranked on retail spending.
• When looking across annual growth rates of the eight economic indicators, Tasmania, the Northern Territory and Queensland each led annual changes on two of the eight economic indicators.
• And the ACT and Western Australia each led on one indicator.

Analysis

• Last quarter we noted that housing and job markets would prove crucial to the performance of state and territory economies. A solid job market provides valuable support for the key indicators of housing purchase, new home building and retail trade.
• Certainly the strength in jobs and housing starts was important in lifting Tasmania to top spot again and in consolidating South Australia in the top three economies. Queensland lost ground to these states on those indicators.
• Looking ahead, the potential for stimulus in the Chinese economy will be important for resources and tourism-focussed states.

Methodology

• Each of the states and territory economies were assessed on eight key indicators: economic growth; retail spending; equipment investment; unemployment, construction work done; population growth; housing finance and dwelling commencements.
• The aim is to find how each economy is performing compared with ‘normal’. And just like the Reserve Bank does with interest rates, we used decade-averages to judge the ‘normal’ state of affairs. For each economy, the latest level of the indicator – such as retail spending or economic growth – was compared with the decade average.
• While we also looked at the current pace of growth to assess economic momentum, it may yield perverse results to judge performance. For instance retail spending may be up sharply on a year ago but from depressed levels. Overall spending may still be well below ‘normal’. And clearly some states such as Queensland and Western Australia traditionally have had faster economic growth rates due to historically faster population growth. So the best way to assess economic performance is to look at each indicator in relation to what would be considered ‘normal’ for that state or territory.
• For instance, the trend jobless rate in the ACT stood at 2.9 per cent in March with Tasmania’s jobless rate at 3.8 per cent. However, Tasmania’s unemployment rate was 37.7 per cent below its decade average, while the ACT jobless rate was 25.4 per cent below its decade average. So Tasmania ranks above the ACT on this indicator.
• Except for economic growth, seasonally adjusted or trend measures of the economic indicators were used to assess performance on all measures. While preference was for trend measures, in many cases these have been suspended in the wake of the COVID-19 crisis. Rolling annual nominal data was used to assess economic growth.

Read the report.

The post CommSec State of the States – May 2023 appeared first on AdviserVoice.