MNI 5 Things:Australia Data Shows Spare Capacity Not Declining

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By Sophia Rodrigues

     SYDNEY (MNI) - The following are the five key observations we made from

Australia's labor force survey for February published by the Australian Bureau

of Statistics Thursday:

     --Australia's labor market has created jobs for 17 months in a row and

added the most jobs in uninterrupted period of job gains -- both new records.

The number of employed persons +17,500 m/m was, however, lower than MNI median

forecast for +20,000 and followed downward revision in January employed numbers.

     --The pace of jobs gains has slowed on a six-monthly basis to a monthly

rate of +26,900 compared with monthly rate of +43,200 in the six months prior.

In particular, the average monthly rate for the two months this year is just

+15,000. If the rate of job growth continues at this slower pace and labor

participation rate remains elevated or rises further, then it poses a risk for

unemployment rate to drop below 5.5%.

     --The quality of job growth in February was good, with full-time jobs

making up all the gains and was offset by fall in part-time jobs. Monthly hours

worked also rose.

     --Underemployment rate (this data point is published every quarter) rose

slightly to 8.4% from 8.3% in November. Labor underutilization rate also rose

slightly to 13.9% from 13.8%. The outcome isn't surprising given the

unemployment rate has moved up to 5.6% in February from 5.4% in November.

Together with jobless rate, they indicate spare capacity hasn't declined in the

labor market despite continued growth in employment.

     --Employment-to-population ratio has remained at 62.0%. This is an

important indicator of the health of the labor market and suggests that the

strength remains.

--MNI Sydney Bureau; tel: +61 2-9716-5467; email: sophia.rodrigues@marketnews.com

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