Firm Labour Market Report, Even With Omicron Impact Persisting

A firm February labour market report, with the higher than consensus headline employment gain of ~77.4K (vs. BBG median of +37.0K) being driven solely by full-time positions as part-time employment fell by ~44.5K.

• Unemployment fell to 4.0% (BBG median of 4.1%) from 4.2%, with employment growth outstripping the slightly larger than expected uptick in participation (to 66.4%). The ABS noted that this was “the third time in the history of the monthly survey when unemployment was as low as 4.0% (February 2008, August 2008, February 2022).”
• In terms of wider slack measures, underemployment registered a fresh cycle low (6.6%). Underutilisation also hit a fresh cycle low (10.6%), although both of these measures continue to operate above their pre-GFC troughs.
• On hours worked, the ABS noted that “seasonally adjusted hours worked rebounded in February by 8.9%, following the large fall of 8.6% in January, when an unseasonally high number of people were sick or on leave. While hours worked rebounded in February, they were still around 0.5% below December, and also still slightly below (0.2%) the pre-Delta period high of May 2021, reflecting a second month of impacts associated with the Omicron variant.” On that note, the ABS went on to highlight that “illness or sick leave was around 80% higher than what we would usually see in February, having been around triple the usual level in January.”