October AU Labour Force Survey: Full-time Employment Leads the Charge
Another strong month for the Australian labour market, particularly among full-time opportunities. Wage growth also took a step in the right direction
In October, the Australian market continued its gradual improvement. The unemployment rate eased further, driven by strong employment growth, while participation in the workforce remains high. Wage growth is showing modest improvement, helped by the creation of high-quality full-time opportunities.
Employment rose by 25,400 people in October on a trend basis, having increased by 22,600 people per month this year. Growth has been slower than last year but remains quite strong overall and is more than sufficient to bring the unemployment rate down.
Full-time roles continues to drive employment growth. Full-time employment rose by 22,900 people in October and has accounted for 83% of employment growth this year, after accounting for three-quarters last year.
Full-time employment growth has underpinned the improvement in unemployment. The unemployment rate has eased to 5.1%, its lowest level since mid-2011, while participation in the workforce remains high.
Nevertheless, broader measures of unemployment remain high. The underutilisation rate, which includes both unemployed and people seeking more hours, is still 13.4%. A sizable share of Australia’s workforce are unhappy with their current job, particularly the hours they are working.
The high level of labour market underutilisation is a primary reason why wage growth remains disappointing. A small degree of progress has been made on that front, with wage growth increasing to 2.3% in the September quarter, but wage growth still remains below its decade average across every industry group. Wage growth is strongest among government-related industries, such as healthcare and education, which are often not subject to the same market forces as other industries.
Employment growth continues to outstrip growth in hours worked across the Australian economy, which effectively means that the average person is working fewer hours. This reflects a combination of factors including a stronger preference for greater workplace flexibility, as well as economic factors forcing people into part-time opportunities.
Labour market conditions continue to vary greatly by state. The unemployment rate in Victoria and New South Wales is around 4.5%, compared with around 6% in the two mining states, Queensland and Western Australia.