MNI 5 THINGS. Australia Unemployment Retests Multi Year Lows

-- Rate Back At 5.0% In December, Participation Rate Slips

By Lachlan Colquhoun

     SYDNEY (MNI) - The Australian Labour Force Data for December showed the

seasonally adjusted unemployment rate 0.1% lower at 5.0%.

     Here are five points of interest from the release by the Australian Bureau

of Statistics.

     --Back to October level. The market had been expecting the unemployment

rate to be unchanged at 5.1% but the fall to 5.0% brings it back to the October

level, the lowest since June 2011. The rate began 2018 at 5.5%.

     --Employment at a new record high. There are now 12.714 million employed

persons in the Australian economy, an all time record, while the monthly hours

worked in all jobs has hit 1.76 billion. Another 21,600 jobs were added in

December, higher than market expectations of around 15,000. The rise was helped

by a fall in the participation rate, down to 65.6% from 65.7% in November.

     --Full time employment growth runs out of momentum. The strong Labour Force

data over 2018 was powered by a growth in full time employment in the early part

of the year. As the economy approaches full employment, the momentum for full

time employment has stalled as more part time jobs have been added. In today's

result, full time employment fell by a seasonally adjusted 3000 jobs, while part

time employment increased by 24,600. Over the 2018 calendar year, full time jobs

increased by 162,000 and part time by 106,600.

     --Results in line with RBA outlook. While market observers have pointed to

a cooling growth, a retreating housing market and a weaker Australian dollar as

evidence of an economic slowdown, the RBA has been consistent in its view that

the strong labour market will flow through to wages growth and inflation.

Today's result is consistent with the RBA outlook, and suggests more evidence

that the economy has changed direction will be needed for the RBA to change its

stance. The Bank has held official interest rates steady at a record low 1.5%

since November 2016 and while it is not expected to change rates in the medium

term, it has consistently said that the next movement is more likely to be up.

     --Victoria leads the way. Of all States and Territories, Victoria has taken

over from New South Wales as having the lowest unemployment. The Victorian rate

fell from 4.5% to 4.2% in December, while in NSW it was stable at 4.3%. All

other regions posted falls in unemployment with the exception of South

Australia, where unemployment went from 5.3% to 5.9%.

--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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