MNI DATA PREVIEW: Australia Jobs Data Offers Next Look For RBA

By Lachlan Colquhoun

     SYDNEY (MNI) - Australia's May Jobs data is set for release Thursday, with

the possibility the unemployment rate could again edge higher. These are the

main points to look for in the Australian Bureau of Statistics data:

     Drifting higher? 

Australia's unemployment rate has inched upwards in the last two months, and may

do again tomorrow. The April rate was 5.2%, up from an upwardly revised 5.1% in

March. The rate hit an eight year low of 4.9% in February.

Key to monetary policy 

The RBA cut interest rates to a record low of 1.25% last week, the first move in

almost two-and-a-half years. In its decision, the RBA cited the labour market as

key to its decision. Increased unemployment and a weak labour market narrows the

odds of another RBA rate cut this year.

Employment keeps rising. 

Although the unemployment rate moved higher in April, the economy added another

28,400 jobs for the month. Over the past year trend employment has increased by

311,000 persons, or 2.5%, which is above the annual growth over the past 20

years. So while the unemployment rate is higher in seasonally adjusted terms,

the size of the Australian labour market continues to increase. If this changes

in tomorrow's data, then that will be an indication of a significant change.

Underemployment the hidden figure 

Underemployment, or the percentage of those people working but would like to

work more hours, is at 8.5%. Added to the unemployment rate, this is 13.7% of

the workforce who are either unemployed or would like to work more.

Participation rate keeps rising. 

The April participation rate was up 0.1 points to 65.8% and has increased over

the last two months. Participation has continued to rise and more people have

continued to find employment and this has been a factor in keeping the overall

unemployment rate steady despite the increasing size of the labour market.

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

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