Economy Struggles To Make Enough Jobs For Increased Labour Force

April employment printed higher than expected at 38.5k, close to the previous 3-month average, after an upwardly-revised 5.9k drop. The details were a bit weaker with the unemployment rate rising to 4.1% from 3.9% and new jobs concentrated in part-time but the data remains volatile. The pickup in unemployment was impacted by people taking time off before starting a new job. Through the volatility, the labour market remains tight but continues to ease gradually, consistent with the RBA’s May view.

• The March unemployment rate was revised up to 3.9% but this was from 3.84% to 3.87%, so not as significant to 2-decimal places. April was 4.054% and so a low 4.1% but still 0.2pp higher than March. Note February fell to 3.7% from a holiday-impacted 4.1%.
• The number of unemployed rose 30.3k to be up 13.7% y/y and the ABS notes that it included those looking for work as well as “more people than usual” waiting to start a job. This effect should be cleared in the May data due on June 13.
• Employment remains strong with the 3-month average in job gains rising to 50.3k from 41.3k and growth rising to 2.8% y/y from 2.4%. But demand couldn’t keep up with supply as the labour force rose 68.8k in April with working age population rising another 57k in the month. The employment-to-population ratio was steady at 64% implying that the labour market remains tight.

Source: MNI - Market News/ABS

• Full-time employment (FT) fell 6.1k while part-time (PT) rose 44.6k and this trend was also reflected in hours worked with FT falling 0.2% m/m and 2.1% y/y but PT rising 0.9% m/m and 6% y/y. Businesses are giving additional hours worked to part-timers signalling a more cautious environment. Total hours were flat in April but down 0.8% y/y.