Free Trial

Labour Market Remains Tight, RBA Uncertain Given Bank Concerns

AUSTRALIA DATA

Employment bounced back 64.6k after declining the previous two months and the unemployment rate returned to 3.5%, close to its October 2022 low. The labour market remains very tight with little sign of easing pressures, thus this data along with the solid NAB business survey point to a further 25bp hike in April. However, market turmoil and overseas banking issues are muddying the waters for the next RBA meeting.

  • There were 64.6k new jobs in February more than expected and more than reversing the cumulative 27.5k drop in Dec/Jan. There was also a return to the trend of rising full-time employment (+74.9k) and falling part-time (-10.3k), reflecting ongoing labour shortages. The ABS noted that the majority of the people waiting to start a new job in January returned to work in February and the numbers waiting to start a new job are back to normal.
  • The number of unemployed fell 16.5k helping to bring the unemployment rate down along with strong jobs. However, the number of unemployed is 4.1% higher than the October trough, which is not surprising given the increase in labour supply through immigration.
  • Underemployment and underutilisation rates all eased back to their recent lows; another indicator of a tight labour market. The former fell 0.4pp to 5.8% and the latter -0.4pp to 9.4%, the lowest since 1982 apart from November 2022.
  • Hours worked also rebounded after three consecutive falls. They rose 3.9% m/m and 5.1% y/y in February with full-time up 4.4% m/m and part-time +1.3% m/m. The ABS commented that there were “almost no major disruptions” to hours worked, as the economy normalises.
  • The participation rate rose 0.1pp to 66.6% but remains below November’s peak of 66.8%.
Australia labour market y/y%

Source: MNI - Market News/ABS

Australia underemployment rate vs underutilisation rate %

Source: MNI - Market News/ABS

To read the full story

Close

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.