As I foreshadowed yesterday, Australia’s unemployment rate fell by 0.07% to 4.0% in May, in line with economists’ expectations.
39,650 jobs were created in May and a marginal decline in the participation rate underpinned the result.
The ABS explained the result with the following:
“In April we saw more unemployed people than usual waiting to start work. Some of the fall in unemployment and rise in employment in May reflects these people starting or returning to their jobs”.
The one glaring weak spot was the ongoing decline in hours worked, which fell by 0.5% in May and has risen by only 0.6% year-on-year. Average hours worked are also trending lower:
Source: Alex Joiner (IFM Investors)
The underemployment rate rose marginally to 6.71%, with the overall underutilisation rate (10.71%) trending up slowly:
Source: Alex Joiner (IFM Investors)
The labour market continues to be impacted heavily by strong population growth mostly via net overseas migration, with the civilian population surging by 2.92% year-on-year:
Source: Alex Joiner (IFM Investors)
Overall, it is the kind of release that will have the RBA sitting on its hand, unmoved either way on interest rates.
