MNI 5 THINGS. Australian Labour Force data critical for RBA

By Lachlan Colquhuon

     SYDNEY (MNI) - The Australian Bureau of Statistics will release labour

force data for March on Thursday April 18.

     Here are five things of interest to look for:.

     With unemployment at an eight year low, where to from here? The February

result surprised the market with a 0.1-percentage-point fall in the unemployment

rate to 4.9%, an eight-year low. The market is expecting a marginal increase

tomorrow, but anything beyond a 0.2-percentage-point increase could have

significant consequences.

     RBA watching closely. The minutes from last month's Board meeting of the

Reserve Bank of Australia revealed that the Bank is fixing on employment and

inflation as it ponders its next move in interest rates. The minutes showed that

a rise in unemployment combined with a fall in inflation could persuade the RBA

to cut rates from the current level of 1.5%. With labour force data tomorrow,

followed by inflation next week, this is a critical fortnight for RBA policy.

     How many more jobs? Last month's rise came despite only a modest rise in

employment, with 4,600 jobs created. The market had been expecting an increase

of around 15,000. Key to the rise was a decline in the participation rate, down

0.2 percentage points to 65.6%. After adding 210,000 full time jobs in the last

year, is job creation running out of steam?

     Full time employment falls. February's result masked a fall of 7,300 in

full-time employment, with part-time employment up by 11,900. This balance

between full and part time will be closely watched.

     Uneven pattern across the states. The largest states of Victoria and New

South Wales have seen strong employment growth, but unemployment increased in

both states in February's result. In Victoria, unemployment increased from 4.6%

in January to 4.8% in February, while in NSW it increased from 3.9% to 4.3%.

Tasmania, where unemployment rose to 7.0% in January, saw a fall to 6.5%. The

jump was even bigger in Western Australia, where the rate fell 1.0 percentage

point to 5.9%. Tomorrow's figures will show if employment has peaked in the

largest states, and give some indication of labour market momentum.

--MNI London Bureau; +44 203 865 3829; email: jason.webb@marketnews.com

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