September AU Labour Force Survey: Another Step Forward
Recent positive trends continued in September, with the unemployment rate easing further and the improvement driven by full-time opportunities.
In September, the Australian labour market continued its gradual improvement with the unemployment rate easing further and employment growth remaining positive, particularly with regards to full-time opportunities.
Employment rose by 26,400 people in September on a trend basis and has increased by an average of 22,300 people per month this year. This might be below the 33,800 people who found work each month last year but is more than sufficient to bring the unemployment rate down.
Full-time roles continues to drive growth in employment. Full-time employment increased by 21,500 people in September and has accounted for around two-thirds of all employment growth this year.
With employment growing strongly, it is little surprise that the unemployment rate continues to ease. At 5.2%, the unemployment rate currently sits at its lowest point since May 2012. With job vacancies still quite high, it appears likely that the unemployment rate will continue to ease over the next six months.
Nevertheless, broader measures of unemployment remain elevated. This continues to weigh on wage growth. We will need to see further improvement in the unemployment and underutilisation rates before wage growth begins to show improvement.
Although employment growth has been strong, we should keep an eye on how many hours Australians are working. Employment growth continues to outstrip growth in hours worked, which effectively means the average person is working fewer hours. Average hours worked has declined by 0.5% over the past year. A further decline in average hours worked is expected in the near-term as workers place greater priority on workplace flexibility.
Labour market conditions vary greatly by state. At 4.5%, the unemployment rate in New South Wales eased to its lowest level since April 2008. Victoria is in a similar boat with an unemployment rate of just 4.7% Yet labour market slack in the other states remains much higher, with the unemployment rate in the two mining states, Queensland and Western Australia, at 6.1%.