October 17, 2024 02:16 GMT
AUSTRALIA: Gradual Labour Market Easing May Have Stalled
AUSTRALIA
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RBA officials often speak on the labour market and today’s September data plus what appears to be a turn in the trend since mid-year will likely confirm its view that the labour market is tighter than implied by full employment estimates and that firms are “labour hoarding”. The gradual deterioration in some of its metrics appears to have stalled or turned, thus policy is likely to “need to be sufficiently restrictive” for now.
- The September underemployment rate fell to 6.3% from 6.5% resulting in the Q3 average 0.2pp below Q2 at 6.4%. The latest reading is still 0.5pp above the February 2023 trough but remains low and now appears to be improving again.
- The rise in the youth unemployment rate appears also to have stalled. It is seen as a leading indicator of the labour market. It fell 0.8pp in September to 9.1%, lowest since February, and Q3 was down 0.1pp on Q2. It remains 2pp above the July 2022 trough.
Australia unemployment rate 15-24 years %
Source: MNI - Market News/ABS
- Vacancies as a share of unemployment are off the 2022 highs and continue to moderate but remain above the series average. In Q3 the ratio moderated 4.8pp to 52.7%, lowest since Q3 2021 but not yet normalised. SEEK reported a 0.5% m/m increase in September job ads with Q3 +1.3% q/q, but they were down 11.1% y/y.
- Hours worked are also recovering growing at 2.4% y/y in September up from 0.2% y/y in June.
- The moderation in NAB’s labour shortages being a significant constraint on output measure also seems to have stalled with both Q2 and Q3 2024 sitting slightly above Q1 and still around 20 points higher than the series average.
Australia NAB quarterly business survey - labour shortages
Source: MNI - Market News/Refinitiv
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