Strong Jobs Growth But Small Cracks Appearing

August employment rose a stronger-than-expected 64.9k and the July drop was revised higher to only -1.4k from -14.6k. The data continue to show a strong labour market but the strong gain in part-time jobs though may be suggesting that the job market is starting to cool and that businesses are more uncertain about the outlook. The underemployment rate edged higher too, which the RBA has been monitoring.

• Job growth remained solid at 3% y/y up from 2.8% and has averaged 37.7k this year not far off 2022’s 43k, signalling that labour demand remains robust. Increased labour supply is helping to meet this.
• Full-time employment rose a sedate 2.8k after falling an upwardly revised 18.7k in July but the level remains 0.2% below June. After underperforming full-time jobs, part-time is now taking the lead with strong momentum and rising 62.1k in August after +17.3k to be up 2.2% y/y after falling 0.1%. The employment ratio returned to 64.5%, it has been around this rate since March.
• The labour force rose 0.4% m/m to be up 3.2% y/y driven by an increase in the working age population of 0.3% m/m and 2.8% y/y and drove a 0.1pp increase in the participation rate to 67%. The moderate 2.7k drop in the unemployed meant that the unemployment rate was steady at 3.7%.
• While the number of employed rose strongly, hours worked fell 0.5% m/m, with full time down 0.7% m/m, the second consecutive fall. Hours are 3.7% higher on the year though and still above jobs growth. But the decline in full-time hours is reflected in the underemployment rate rising to 6.6% from 6.4%. The level remains low but the 3-month average is now 0.5pp above its November trough.

Source: MNI - Market News/ABS