Australia records a promising job growth in August
Employment data in Australia
Employment data in Australia for the month of August is positive and better than the expectations. Australia has added 44,000 jobs during this month in terms adjusted seasonally, above the fore-casted growth of 18,000 jobs.
The rate of participation was higher by 0.2 percentage, reaching 65.7%. This also means that it was steady at 5.3%. The increase in full-time employment, stood at 33,700 in seasonally adjusted terms. The increase in Part-time employment was 10,200.
Moreover, The Australian dollar moved to US 72 cents, instantly subsequent to the release, but is down now. With the increase in August, the total number of employed persons stands at 12.631 million, which is a record. Today’s result included quarterly data on underemployment and underutilization.
The Quarterly data on the underemployment with professionals liking to work for more hours decreased to 8.1%. Thus the under utilization rate, which is a sum of under employment, plus the unemployment rate, has decreased by 0.4 %, and was at a low in the past five years at 13.4%. Underemployment reflects the labor market picture, and with the current decline in the underemployment rate, it can better the outlook for an increase in wage growth. This result will give a boost to the R.B.A., regarding the using of the spare capacity.
Using excess supply of labor is the foundation for a meaningful increase in wage growth. Moreover, there is a doubt about the increase in wage growth from 2.1% presently to 2.5% in 2020.
NSW with a gain of 43,200 had the maximum month wise job increase in seasonally adjusted terms. The greatest decrease (8,400) was in South Australia.
Performance of States
Also there was decrease in the unemployment rate in Tasmania, NSW, and Victoria. In WA and Queensland it increased. A decline in the underutilization rate is good news for the economy.
There is sufficient evidence to show an improvement in wage growth. Such wage growth that can impact on inflation, and move it towards 2-3% target, is still not visible. The pressure for increasing the rates, will happen when employment growth facilitates higher wage growth. Experts feel that the decrease in underemployment is an encouraging sign, but there a long way to achieve decent wage growth.
Jobs and Permits will guide and inform all the interested persons regarding such developments and reports in the future also.