Australia: Unemployment rate remains low in November
December 14, 2017
Seasonally-adjusted employment increased by 61,600 in November compared to the prior month, up sharply from October’s revised 7,800 increase (previously reported: +3,700) and significantly overshooting analysts’ expectations. Encouragingly, the marked rise was driven by a 41,900 increase in full-time employment, with part-time employment expanding 19,700. This ate into the still-elevated underemployment rate, which dipped from 8.5% to 8.3%.
The labor market participation rate reached a fresh multi-year high in November, rising from a revised 65.2% in October (previously reported: 65.1%) to 65.5%, while the unemployment remained at 5.4%, the joint-lowest since February 2013. Taken together, November’s figures are indicative of solid business confidence and a robust economy. However, a strong labor market has yet to translate into higher wages. Data recently by the Australian Bureau of Statistics in November showed 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—as indicated by prevalent underemployment—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