MNI DATA PREVIEW: Australia Unemployment Rate Seen Unch At 5%

By Lachlan Colquhoun

     SYDNEY (MNI) - Australian Labour Force Data for February is set to be

released Thursday. Here are five points of interest to look for in the

Australian Bureau of Statistics release.

Low employment growth, but jobless rate seen unchanged. 

The market expects that although fewer jobs were created in February the

unemployment rate will hold steady at 5.0%. The median forecast is that 15,000

jobs were created in February, less than half of the 39,100 created in January.

There are several dissenting views, notably from Westpac, forecasting

unemployment at 5.1%.

Labour Force crucial for RBA. 

The Reserve Bank of Australia has consistently pointed to the strong labour

market as a sign of a healthy economy, even though the Bank revised its

employment forecasts lower in the last Statement on Monetary Policy. The RBA

forecast is for unemployment to remain at 5.0% for all of 2019, before falling

to 4.9% next year. Low unemployment is key to the RBA's more positive outlook,

in which a strong labour market flows through to wages and consumption growth.

Full time or Part time. 

Reversing the trend of recent months, last month's increase was driven by a rise

in full time employment with 65,400 new jobs created, while the number of part

time jobs fell 26,300. The number of people employed in Australia has grown 2.2%

in the last 12 months, and the RBA is forecasting 2.3% this year.

Full employment for NSW. 

Although New South Wales is the state with the biggest downside risk from

falling property prices, it is also experiencing the lowest levels of

unemployment, with the rate falling from 4.3% to 3.9% month on month to January.

The compares with Tasmania, where house prices are at record highs, but

unemployment added 1.0% to 7.0% in one month. Tomorrow's NSW data will be a test

of what level equates to full employment.

Federal election a "referendum on wages". 

A Federal election is set for the first half of this year, with both the

incumbent Liberal National Coalition and the Opposition Labor Party strongly

focussed on the labour market. For the Government, continued strength in the

labour market is a sign of their economic management, while Labor says that

despite low unemployment, wages growth is too sluggish and has promised to

address this. Although not taking sides, the RBA has also said that Australian

workers need to be rewarded with higher wages for the overall health of the

economy.

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

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