Exclusive interviews with leading policymakers that convey the true policy message that impacts markets.
Reporting on key macro data at the time of release.
Real-time insight on key fixed income and fx markets.
- Emerging MarketsEmerging Markets
Real-time insight of emerging markets in CEMEA, Asia and LatAm region
- MNI ResearchMNI Research
Actionable insight on monetary policy, balance sheet and inflation with focus on global issuance. Analysis on key political risk impacting the global markets.
- About Us
Repeats Story Initially Transmitted at 01:28 GMT Mar 22/21:28 EST Mar 21
By Sophia Rodrigues
SYDNEY (MNI) - The pace of jobs growth in Australia slowed for the second
straight month, keeping the jobless rate around 5.5% and posing risk for the
outlook for spare capacity to slowly decline and therefore for pickup in wage
The data poses downside risk for a hike in the Reserve Bank of Australia's
cash rate by this year-end but keeps intact possibility for a hike in the early
part of next year.
Data published by the Australian Bureau of Statistics Thursday showed the
number of employed persons rose 17,500 in February, falling short of MNI median
forecast for +20,000. In the two months this year, the average monthly gain was
+15,000. In the last six months, the monthly average is +26,200 compared with
+43,200 six months prior to that.
Labor participation rate rose, leading to rise in the unemployment rate to
5.6% from 5.5%, and disappointing expectation for the jobless rate to remain
unchanged at 5.5%.
Despite the two headline disappointments, the data could be described as
mixed as full-time jobs rose, monthly hours worked increased, labor
participation rose and employment-to-population ratio remained elevated.
The unemployment rate has hovered around 5.5% mark (range 5.4% to 5.6%) for
ten straight months, indicating the rate is likely to remain sticky around this
level unless the last year's trend of strong job gains continues this year, or
labor participation rate declines.
This is a key risk for the Reserve Bank of Australia's outlook for slow
decline in the jobless rate. It is also a risk for expectations for cash rate
hike late this year as the RBA may need to feel some confidence that jobless
rate will fall towards 5.0% before it brings rate hike discussion on the table.
In the February Statement on Monetary Policy, the RBA said, "It is unclear
whether participation rates will increase further and, if so, by how much; this
represents an uncertainty around the question of how spare capacity in the
labour market is likely to evolve."
Other indicators in the data also validate the risk for decline in spare
capacity. Underemployment rate rose slightly to 8.4% in February from 8.3% in
November, and labor underutilization rate also increased to 13.9% from 13.8%.
But offsetting some of the risk is the fact that employment continues to
grow and in the latest month, the gain were entirely due to increase in
full-time jobs. In line with this, monthly hours worked rose. Such outcomes are
positive for household income and thus for outlook for household consumption,
Below are key details of the labor force data for February:
(M/M, seasonally adjusted) (M/M, seasonally adjusted)
Employed Persons +17,500 +16,000)
+20,000 (range +7,500 to
MNI Consensus +30,000)
-53,200 (revised from
Full-time Employment +64,900 -49,800)
+65,600 (revised from
Part-time Employment -47,400 +65,900)
Unemployment Rate 5.6% 5.5% (revised from 5.5%)
MNI Consensus 5.5% (range 5.3% to 5.6%)
Participation Rate 65.7% 65.6% (no revision)
MNI Consensus 65.6%
-6,800 (revised from
Unemployed Persons +8,900 -7,900)
Population 62.0% 62.0% (no revision)
Underemployment Rate 8.4% 8.3% (No revision from Nov)
13.8% (revised from 13.7%
Underutilization Rate 13.9% Nov)
--MNI Sydney Bureau; tel: +61 2-9716-5467; email: firstname.lastname@example.org