As summarised earlier by Houses & Holes, the Australian Bureau of Statistics (ABS) today released labour force data for the month of June, which registered an increase in the headline unemployment rate to 6.0% from an upwardly revised 5.9% in May. The result disappointed analyst’s expectations of an unemployment rate of 5.9%.
Total employment increased by a seasonally adjusted 15,900 to 11.578 million in June. The increase in jobs was driven by a 19,700 increase in part-time jobs, partly offset by a 3,800 reduction in full-time jobs. Aggregate monthly hours worked rose by 15.1 million hours (0.9%) to 1 ,629.1 million hours.
The participation rate also increased by 0.1% to 64.7%, which is the fundamental reason why the unemployment rate fell, and softens the blow of the seemingly poor headline result (see below charts).
Total employment continues to trend-up, albeit very slowly (see next chart).
Growth in full-time jobs (0.5% YoY SA / 0.6% YoY Trend) also continues to improve, albeit still remains soft:
Employment growth continues to be driven almost exclusively by the mining states, with Queensland’s large LNG projects still presumably playing a major role (see next chart).
And the Southern States have the highest unemployment rates (see next chart).
The state seasonally-adjusted figures are notoriously volatile and subject to a big margin of error. As such, the below chart shows the ABS’ trend unemployment rates, which shows Western Australia and New South Wales with the lowest unemployment (and heading lower), Tasmania and South Australia with the highest, with Victorian and Queensland unemployment also elevated. Note also that the national unemployment rate (5.9%) was flat in trend terms:
A positive from this release is that the aggregate number of hours worked jumped by 1.7% in June, and continues to rebound after April’s heavy fall. It has also risen by 2.1% over the year, which is above the circa 1.8% growth in the population:
The below chart, which tracks the changes in hours worked on a trend basis, shows a mixed bag across the states and a flat trend nationally (+0.6% YoY):
Moreover, the average number of hours worked remains near all-time lows:
Another positive was that the participation rate rose by 0.1% in June, although the employment-to-population ratio remained flat in seasonally-adjusted terms. However, both have more or less stabilised in trend terms, which is positive after the sharp falls in both measures over 2013 (see next chart).
Finally, the next chart summarises the annual change in the key employment aggregates on a seasonally-adjusted basis:
What it clearly indicates is that Australia’s labour market remains soft, whereby employment growth remains positive but at a pace that is insufficient to offset the growing population.
Still, there are some positive signs emerging, including the recent recovery in full-time employment (albeit growth remains soft), as well as the recovery in aggregate hours worked (although growth is also soft). The recent stabilisation in the participation rate and the employment-to-population ratio are also positives.
As always, mining cliff awaits, however, which will act as an ongoing headwind to employment. The problem is perhaps compounded by the fact that Queensland and Western Australia continue to drive jobs growth, suggesting a lack of rebalancing currently.
And let’s not forget that there is the recent slump in consumer sentiment, which if maintained could also dampen the economy’s rebalancing to the non-mining sectors, creating further headaches for employment.