Australia: Soft employment data – Westpac

According to Justin Smirk, analyst at Westpac, Australia’s June Labour Force was a soft update with unemployment almost printing 5.3% and robust trend in participation being revealed.

Key Quotes

“An expected soft update but a robust trend in participation was confirmed making it much harder to get unemployment below 5% any time soon, let alone getting down the RBA’s natural rate of 4.5%. Westpac is forecasting the unemployment rate to rise from here.”

“The June Labour Force Survey reported a 500 gain in employment. So far this year employment has been robust with a three month average of +29.2k in June from +35.8k in May and +24.45k in April.”

“The May survey reported a strong +45.3k gain in employment (revised from 42.3k) with participation surging to a new record high of 66.0% boosting the labour force and lifting unemployment to 5.2%. As such, we had thought there was a high risk of a statistical correction this month, Westpac's forecast was a 10k rise in employment, market median was 9k.”

“In the year to June, employment has grown 296.3k or 2.4%. The pace of employment growth has eased back from 2.9%yr in May but it is still stronger than the 2.2%yr at the end of 2018. Our Jobs Index suggests employment should be growing around 2.4%yr currently before slowing to 2.1%yr through Q4.”