Strong Labour Data Across The Board, RBA Hikes To Continue

Australia’s labour market data for October came in significantly stronger than expected. The details are also strong and not only support consumption going forward but make a 25bp RBA hike in December highly likely. But it is unlikely to be enough to make it 50bp though, given that consistency is important to the RBA, their other concerns and the lagging nature of the labour market.

• The number of employed rose 32.2k, which was not only above the consensus 15k but at the upper end of expectations, and above the monthly average for 2022. The unemployment rate fell 0.1pp to 3.4% as the number of unemployed fell 21k (consensus 3.5%). The participation rate was stable from the downwardly revised September reading of 66.5%.
• The underutilisation rate fell 0.2pp to 9.3%, the lowest in 40 years. The underemployment rate fell 0.1pp to 5.9%, the lowest since the global financial crisis.
• Given the labour shortage, the trend of part-time jobs becoming full-time continued. Full-time employment rose 47.1k and is now 6.4% higher than a year ago, which is a new record high. While part-time fell 14.9k but is still up 4.8% y/y, it is now recording falling 3-month momentum. This trend towards working more was also reflected in the momentum in hours worked exceeding employment.
• There were a number of special factors impacting hours worked in both directions. 10% fewer people took annual leave in October than usual, but 30% more worked less due to sickness and recent floods also reduced hours worked.

Source: MNI - Market News/ABS