MNI DATA ANALYSIS: Australia Labor Data Supports RBA Optimism

--Strong Labor Market Data On All Counts

By Sophia Rodrigues

     SYDNEY (MNI) - The number of employed persons in Australia recorded the

biggest monthly increase in seven months in June but a rise a labor

participation meant the jobless rate was unchanged at 5.4%. 

     The data supports the Reserve Bank of Australia's view that the economy is

making progress towards its goal of lowering the jobless rate and moving

inflation to the mid-point of the target band, and therefore the next move in

the cash rate is more likely to be an increase, rather than a decrease.

     Data published by the Australian Bureau of Statistics Thursday showed the

economy added 50,900 jobs in June, an outcome which beat MNI median forecast for

15,000 increase and was well outside the range predicted in the MNI poll.

     The data was strong on all counts despite the unemployment rate remaining

unchanged at 5.4%. Labor participation rate rose to a level last seen in

February and the employment-to-population ratio was the highest since January.

     The rise in employment was mainly due to increase in full-time jobs which

rose 41,200 while part-time jobs rose 9,700. In the past year, full-time

employment has risen by 158,200 which equates to an average monthly increase of

13,100. Part-time employment has risen by 180,800 at an average rate of around

15,000.

     Hours worked rose 10.7 million hours to 1,750 million. The number of

unemployed fell 1,100 in June after a 25,100 fall in May.

     In the minutes of the July board meeting, the RBA's language on the labor

market was very optimistic. The RBA said the outlook for the labor market has

remained positive and pointed to the historically higher level of vacancy rate. 

     "Leading indicators of labour demand pointed to above-average employment

growth over the second half of 2018. Consistent with this, members noted that

wage pressures had been building in some parts of the economy but had not yet

become broadly based," the RBA said.

     Below are key details of the labor force data for June:

                                               June                          May

--------------------------------------------------------------------------------

                         (M/M, seasonally adjusted)   (M/M, seasonally adjusted)

                                                            +13,400(revised from

Employed Persons                            +50,900                     +12,000)

                           +15,000 (range +8,000 to

MNI Consensus                              +20,000)

Full-time Employment                        +41,200                      -19,900

Part-time Employment                         +9,700                      +33,400

Unemployment Rate                              5.4%           5.4% (no revision)

MNI Consensus             5.4% (range 5.4% to 5.6%)

Participation Rate                            65.7%          65.5% (no revision)

                         65.5% (range from 65.5% to

MNI Consensus                                65.6%)

                                                            -25,100(revised from

Unemployed Persons                           -1,100                     -26,800)

Employment to

Population                                    62.1%    62.0% (revised from 61.9%

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

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