Australia: The labor market remains robust in December
Seasonally-adjusted employment increased by 34,700 in December compared to the prior month, down from the prior month’s revised 63,600 increase (previously reported: +61,600) but still markedly overshooting analysts’ expectations. The rise was driven by a 15,100 increase in full-time employment and a 19,500 increase in part-time employment.
The labor market participation rate reached a fresh multi-year high in December, rising from 65.5% in November to 65.7%. As a result, despite solid employment growth the unemployment rate also ticked up to 5.5% from 5.4% in the previous month as more people looked for work. Taken together, December’s figures are still indicative of solid business confidence and a robust economy, and mark the end of a solid year for the labor market. However, despite healthy expansions in employment, wage growth remains measly. This is likely due in part to elevated underemployment, which hints at continuing slack. The unemployment rate will need to fall further towards the RBA’s estimate of the potential rate before generating substantial wage pressures.