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MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
RBA
On Tuesday RBA Deputy Governor Bullock spoke about the labour market and achieving full employment. She said that while the NAIRU is difficult to estimate, Australia is currently below it and so labour demand exceeds supply and they need to be back in balance to return inflation to target (see RBA Aiming To Return Unemployment To Neutral To Contain Prices). She showed some indicators that the RBA is monitoring to gauge the degree of labour market tightness. The charts below show a number of them.
- The indicators that the RBA are looking at are still clearly pointing to a very tight labour market. The unemployment rate continues to hover around its series low of 3.4% and we are yet to see a material rise in this indicator. It remains around 1pp below the RBA’s 4.5% estimate of the NAIRU.
- The underemployment rate, those who would like to work more, is another measure the RBA is watching and while it has risen 0.6pp, it also remains historically low.
- Vacancies are off their peak but remain elevated and there are still job openings for 85% of the unemployed. And job churning also remains high.
Australia unemployment vs underemployment rate %
Source: MNI - Market News/ABS
Australia vacancies to unemployment %
Source: MNI - Market News/Refinitiv
*Q2 vacancies estimated from monthly data, unemployment Apr/May average
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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