Always amusing when Straya prints one of its rare good numbers and the bulls charge:
Solid jobs data sends pessimists scrambling
- At face value the March jobs data was ‘one out of the box’ – an outlier if you like. But the gain of 60,000 jobs was backed up by additional job gains of more than 37,000 in April. Now clearly it is no fluke. In fact jobs have lifted for the past seven months, averaging gains of around 25,000 a month. Unemployment is falling and hours worked are up 1.3 per cent over the year – the best annual growth in 11 months. The forward indicators like job ads and business surveys had been pointing to a stronger job market and indeed it does now appear to be reality.
- Employment is a lagging indicator – it reflects business decisions made 5-6 months ago. In late 2016/early in 2017, economic conditions were indeed picking up, causing more businesses to take on staff. The hiring process means that the applicants are now be taking up new positions. And with job vacancies and job ads both rising, further gains in jobs can be expected in coming months with a lower jobless rate.
- Interest rates are set to remain on hold for an extended period. While the job market is improving and justifying Government and Reserve Bank forecasts, it will take some time for the stronger results to be reflected in higher wages and stronger consumer spending. But clearly the latest data is encouraging.
- NSW is arguably at full employment. And just as higher Sydney home prices are lifting home prices elsewhere in the nation, the hope is that NSW wages can start lifting with the gains extending across the land.
Enjoy your moment, Mr James.
