Australian employment report for February 2019

The two 'headlines' to watch are:

Employment Change +4.6K for a miss … but chek out the fall in the unemployment rate

  • expected +15K, prior +38.3K, revised from +39.1K

Unemployment Rate 4.9% a beat

  • expected 5.0%, prior 5.0%

Full Time Employment Change -7.3K

  • prior was +65.6K, revised from +65.4K

Part Time Employment Change +11.9K

  • prior was -27.3K, revised from -26.3K

Participation Rate 65.6% - this is a miss and will take some of the shine off the jobless rate drop

  • expected 65.7%, prior was 65.7%

----

OK, let's get these out of the way:

Positives:

  • The jobless rate beat, dropped under 5% to 4.9% - the RBA will like this indeed
  • You'll need to check the 'trend' figures below, but hours worked higher

Negatives:

  • employment change miss
  • participation rate miss (will take some shine off the jobless rate result)
  • full time workers dropped
  • revisions net negative (swings and roundabouts here)

AUD has been marked higher, takes out some prevailing shorts. The 'story' will be that beat on unemployment.

How is this for a summary?:

This is a mixed result, on balance a bit on the soft side .... BUT that headline unemployment rate under 5%, coming in at 4.9%, has given the excuse to take the AUD higher.

The unemployment rate result will give cheer to the RBA (not saying that is justified but it will) and reduces (if there was any prospect) the chance of any near term rate cut from the Bank.

----

OK, all of the above are the 'seasonally adjusted, these are the immediate focus. There is also the 'trend data' which the ABS tells us is more reliable. Here it is:

  • Trend unemployment rate steady at 5.0%
  • trend monthly employment increased by 20,600
  • Full-time employment increased by 12,300
  • part-time employment increased by 8,200
  • Over the past year, trend employment increased by 290,700 persons (2.3 per cent) which was above the average annual growth over the past 20 years (2.0 per cent).
  • The trend monthly hours worked increased by 0.1 per cent in February 2019 and by 1.9 per cent over the past year. This was slightly above the 20 year average year-on-year growth of 1.7 per cent.
  • The trend monthly underemployment rate decreased by less than 0.1 percentage points to 8.1 per cent in February and by 0.4 percentage points over the year
  • The trend underutilisation rate decreased less than 0.1 percentage points to 13.1 per cent, and by 0.9 percentage points over the year.

ABS Chief Economist Bruce Hockman: "The trend unemployment rate declined 0.5 percentage points over the year, from 5.5 per cent to 5.0 per cent. The pace of decline slowed in recent months, which was consistent with the slowdown seen in recent Job Vacancies and GDP numbers."

more to come