Labour Market Tightens Further, Continuing RBA Concern

Employment grew by significantly more than expected in November and October was also revised up almost 11k. There were 64k new jobs in the month which was enough to keep the unemployment rate stable at 3.4% despite the participation rate rising 0.2pp to 66.8%. This report suggests that the labour market must be close to capacity and that it is likely to continue flashing red for the RBA.

• The economy has added 482.4k jobs this year with 166.8k of those being in the last four months. Employment is now 6% above March 2020, the pre-pandemic peak.
• The number of full-time jobs rose 34.2k in the month and 478.9k for the year and part-time rose 29.7k and 3.4k respectively. The huge gap between full-time and part-time job growth in 2022 reflects employers’ response to severe labour shortages.
• Hours worked fell 0.4% m/m due to a third more people being off due to illness than is normal for the time of year. This follows a strong 2.4% increase in October and the level is well above pre-Covid. 3-month momentum rose to 8.7% for full-time but is -1.5% for part-time.
• The underutilisation rate fell 0.1pp to 9.3%, it is now its lowest since early 1982 and another indicator showing the degree of labour market tightness. Underemployment fell 0.1pp to 5.8%.
• The increase in the participation rate brought it back to its record high reached in June 2022 and it is now 1pp higher than February 2020. The employment-to-population ratio is now also at a record high of 64.5%.

Source: MNI - Market News/ABS