MNI 5 THINGS. Australia Unemployment Rate Seen Steady At 5.1%

--Employment Data To Be Released Thursday January 24

By Lachlan Colquhoun

     SYDNEY (MNI) - Australian Labour Force Data for December will be released

on Thursday January 24 by the Australian Bureau of Statistics. Here are five

factors to look for in the data release: 

     --Unemployment rate seen as steady. The market is expecting the

unemployment rate to be unchanged at 5.1%, just above a decade low 5.0% posted

in September. The rate began 2018 at 5.5%.

     --Reserve Bank watching closely. Thursday's release is the first

significant data since Christmas and the RBA will be watching closely in advance

of making its first interest rate decision on February 4. The RBA's forecast

outlook is for unemployment to continue to fall in 2019, flowing through to

higher wages, consumer spending and ultimately lifting inflation from the

current annualised 1.9% and into the 2% and above range, at which point the Bank

could move to raise rates. A raft of flat economic data in the latter part of

2018, in addition to a falling housing market, is clouding that outlook and the

RBA will be looking at Labour Force data to see if year end data offer any clues

as to how 2019 could develop.

     --Participation rate testing record. The participation rate of Australians

either employed or seeking employment reached a seasonally adjusted 65.7% in

December, just under the all time high of 65.8% of November 2010. Driven by

population increases there are a record number of Australians now employed, with

37,000 people joining the labour force in December with the total number now at

12.69 million. The market is expecting the market to have added another 15,000

or more jobs last month.

     --Full time or part time? The December data showed a surge in part time

employment, increasing by 43,400, while full time employment fell by 6400. This

drove a fall in the total hours worked, which in turn contributed to the slight

uptick in the overall unemployment figure. This went against the trend for 2018,

which showed the reverse trend.

     --Disparity between states. The "two speed" nature of the Australian

economy continues to be reflected in the employment data. Resource dependent

states Western Australia and Queensland continue to post the highest

unemployment rates, at 6.5% and 6.4% respectively in November. An export boom

for Liquified Natural Gas (LNG) occurred in 2018 as major projects in these

states came on stream, but this is yet to flow through to employment. The soft

employment numbers in the resource states contrasts with New South Wales, where

the figure is a national low of 4.4%. With employment in the largest states of

NSW and Victoria now at full capacity, any fall in national unemployment relies

on an improvement in the WA and Queensland economies.

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

--MNI Sydney Bureau; +61 405322399; email: lachlan.colquhoun.ext@marketnews.com

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