No Policy Implications From Noisy Labour Market Report

The latest labour market release was always going to be hard to decipher and will not shape Australian policy in any meaningful way. While the headline employment figure (-146.3K) missed the median expectation (-80.0K), it was still within the wide bands of the BBG survey (-300K to +2K), and always had the possibility to surprise given the COVID dynamic witnessed in Australia over the survey period. The fall in participation is similar to what was seen in past lockdown experiences, and actually resulted in an unexpected downtick in the unemployment rate (to 4.5%). Outside of the noisy headline numbers, policymakers will continue to focus on the hours worked component, which fell by 3.7% on a national level (once again, a drop was expected owing to the COVID situation). Policymakers expect a swift economic bounce back as Australia emerges from its COVID restrictions and the hours worked reading, alongside the underemployment and underutilisation components, will be worth watching in the coming months. A deeper, sustained fall in hours worked may raise some eyebrows within both the government and the RBA (the measure remains comfortably above the '20 lows, see earlier graph).