Jobs Growth Disappoints But Remains Tight, Coming Months Key

Employment in December disappointed by falling 14.6k after rising a downwardly revised 58.3k in November. The unemployment rate was stable at 3.5%. However, the details showed that the shift from part-time to full-time employment continued in the face of a very tight labour market. One month doesn’t make a trend and overall the data show a strong labour market but the next couple of reports will be important for assessing if it is easing.

• Full-time employment rose 17.6k in December after 33.3k the previous month. Whereas part-time fell 32.2k after rising 25k. Overall 2022 added 452k jobs with full-time contributing 496.8k while part-time contracted 44.8k. Importantly, overall and full-time jobs are showing robust and rising 3-month momentum, while part-time continues to deteriorate.
• The unemployment rate was revised up in November from 3.44% to 3.47%, which pushed it up 0.1pp after rounding. In December it was slightly higher again at 3.51%. It may have troughed in October at 3.41% as the number of unemployed have risen 15.5k since then, but the latter is volatile. The participation rate was 0.2pp lower at 66.6%, still historically high.
• The underemployment and underutilisation rates also rose to 6.1% and 9.6% respectively. Underemployment is in line with the 2022 average while underutilisation remains below.
• Hours worked have been impacted by illness more so than usual over the last year. Hours fell a further 0.5% m/m in December but the ABS noted that they were again reduced due to a 50% increase in the hours lost due to illness than usual. On the year they are up 3.2% y/y with full-time up 4.5%.
• See press release here.

Source: MNI - Market News/ABS