Pressured After Labour Market Data

The space is under some pressure in the wake of a firmer than expected round of headline labour market numbers for February, with the much larger than expected gain in headline employment driven solely by full-time employment gains and resulting in a sharp fall in unemployment. YM -1.5, XM -5.0, revisiting early Sydney levels after XM benefitted from the previously flagged uptick in U.S. Tsys ahead of the local data release.

• Encouragingly, the ABS noted that "the strong employment growth this month saw employment rise above 13 million people, and was 4,000 people higher than March 2020. Seasonally adjusted hours worked bounced back in February, increasing by 6.1%, following the 4.9% fall in January, when more Australians than usual took leave. Hours worked were 0.7% below the level seen in March 2020, reflecting a 94% recovery in the fall in hours between March and May. Hours worked increased across all of the states and territories, except for in Western Australia, where hours were affected by the lockdown in the first week of February."
• Elsewhere, the ABS noted that "underemployment increased by 0.4 percentage points to 8.5% in February, having fallen more than usual in January, to remain around its pre-pandemic level. The underutilisation rate, which combines unemployment and underemployment, decreased by 0.1 percentage point to 14.4%. This was 0.3 percentage points above March 2020, and 5.8 percentage points below its peak in May 2020."