Australia: Unemployment unexpectedly dives to pre-pandemic levels in May
Seasonally-adjusted employment jumped by 115,200 in May, following 30,700 jobs shed in April and surprising markets on the upside. May’s result was driven by increases in both part-time and full-time employment.
Meanwhile, the seasonally-adjusted unemployment rate fell to 5.1% in May, from April’s 5.5%, logging the lowest reading since December 2019 and markedly down from the 7.5% peak reached in July 2020. Moreover, the seasonally-adjusted underemployment rate dropped from 7.8% in April to 7.4%. Moreover, the participation rate increased to 66.2% from the previous month’s 65.9%.
Commenting on the release, Robert Carnell, Asia-Pacific regional head of research at ING, stated:
“What’s missing from the picture still, on a day when Governor Lowe talked about scenarios where rates might be raised in 2024 in a speech in Toowoomba, is any indication of stronger wage pressure. The next quarterly wage price index for 2Q21 is not released until 18 August, so we may need to look elsewhere for any wage pressure signs. But with the US Fed now openly predicting not just one rate hike in 2023, but two, it is possible that we also see the guidance from the RBA edge in this direction in the coming months. And any anecdotes of rising wages growth in the meantime could see markets front-run any such guidance.”