If you’re looking for a job or for more working hours, you can feel more optimistic.
Australia’s unemployment rate held steady at 5.6 per cent for August, but the figures underlying that result are cause for optimism.
In August, 27,000 new jobs were created – and what is most encouraging about that is that 22,000 of those were full-time.
“Full-time employment has now increased by around 253,000 persons since August 2016, and makes up the majority of the 307,000-person increase in employment over the period,” said ABS chief economist Bruce Hockman.
Using the ABS’s seasonally adjusted measure, the figures were even stronger, up 54,200 for the month with most of them full-time.
The result was well in excess of the 20,000 jobs all up predicted by a panel of economists before the announcement. Nicki Hutley, chief economist with research group Urbis, told The New Daily that “the headline figures look better than trend” which means they indicate an uptick in jobs growth, though just over one month.
Independent economist Saul Eslake described the result as “good in every respect”.
“So far this year employment has grown around 30,000 a month with 22,000 of those full-time,” he said.
The result “should give the RBA greater confidence that its base case for a lower unemployment rate, firmer wages growth and eventual return to target inflation is on track”, Su-Lin Ong, an economist with bank RBC, said in a statement.
The continuing growth of full-time jobs means that the stubborn problem of underemployment that has hit Australia since the GFC could be starting to ease.
The number of employed people rose 2.6 per cent last month, well above the 1.9 per cent trend over 20 years. And the number of hours worked is up 2.7 per cent over the year to August.
What you need to compare those two figures with is the growth in working-age population of 1.7 per cent. With that in mind, you see not only is the number of jobs growing faster than the working population, time on the job is also outgrowing worker numbers. That means underemployment is becoming less severe.
The dotted line at the top of this chart is the thing to look at. It shows that underemployment kicked up after the global financial crisis (GFC) and, while dipping a little from 14.4 to 14.1 recently, is still unhealthily high.
“We’re still looking at an all-time high of underemployment,” said Stephen Anthony, chief economist with Industry Super Australia.
“We’re seeing growth increase, but there’s little productivity growth so there is no real wealth generation to push up incomes.”
Underemployment decreased to 8.6 per cent, a fall of 0.2 percentage points from July to August. Ms Hutley said: “While there is still plenty of underemployment there is some encouragement for wages over the next year.”
The job growth is drawing discouraged job seekers out of the woodwork. The participation rate, at 65.3 per cent, is up 0.6 percentage points in a year. For women, participation is at 60 per cent, the highest on record.
There was improvement for women in several places. They saw a larger fall in unemployment than men, from 5.8 per cent to 5.6 per cent. Women also recorded a higher jump in hours worked, at 3.3 per cent compared to 2.3 per cent for men.
The Australian dollar increased marginally to US80.01c after the announcement and Australian shares lost ground with the All Ordinaries Index down 0.1 per cent to 5798.4 points.