Australia: Unemployment rate dips to fresh multi-year low in October
November 16, 2017
Seasonally-adjusted employment increased by 3,700 in October compared to the prior month, down from the revised 26,600 jobs created in September (previously reported: +19,800 jobs) and sharply undershooting analysts’ expectations. The slight rise was mainly due to a 24,300 increase in full-time employment, while part-time employment fell by 20,700.
The labor market participation rate dipped marginally from September’s over five-year high of 65.2% to 65.1% in October, while the unemployment rate dipped from 5.5% to 5.4%, marking the lowest rate since February 2013. Despite lower-than-expected employment growth, October’s figures are encouraging, and reflect a robust economy. However, lower unemployment has yet to translate into meaningfully higher wages. Recently released data shows that wages grew a mere 0.5% quarter-on-quarter in Q3, below market expectations and matching Q2’s figure. This suggests slack in the labor market is still present, and that the unemployment rate will need to fall further towards the RBA’s estimate of the potential rate before generating substantial wage pressures.
Author: Oliver Reynolds, Economist