The ABS has shocked the markets with some very strong jobs numbers for May. The headline (seasonally adjusted) unemployment rate has fallen to 5.5% (its lowest level since Feb 2013) on the addition of a thumping 42,000 new jobs. The markets had been expecting the unemployment rate to stay at 5.7% and about 10,000 jobs to be added. All of those 42,000 new positions came in the full-time sector which was up 52,100. Participation also rose slightly curtailing an even sharper decline in the unemployment rate.
However, before we all start getting too excited we should take a moment to look at the Trend series (what the ABS recommends should always be done anyway). Here we see 25,200 new jobs added (and March revised slightly higher too) and an unemployment rate at 5.7%. Trend jobs growth over the past 12 months is averaging 16,200 per month, so the current pace of growth is certainly better than that. It’s worth noting that the Trend unemployment rate has been stuck between 5.7% and 5.8% since December 2015 so it would certainly suggest that the kind of move seen in the seasonally adjusted numbers may be somewhat over stated.
Queensland too saw better numbers although here things are decidedly more muted. Seasonally adjusted jobs were up 5,500 although full-time positions fell by 11,200. The unemployment rate fell to 6.1% (from 6.3% in March) with Participation stable. Again the Trend series paints a more reliable picture; jobs rose by 5,900 (after March was revised slightly stronger) and have been growing at an average pace of 2,600 per month over the past 12 months. Trend full time positions, however, are almost static having risen just 1,800 over the whole 12 month period. The Trend unemployment rate sits at 6.3% (unchanged in 5 months). As the chart below makes clear, although jobs are growing (and the pace has picked up over the past few months) the rate of growth is only just sufficient to keep up with population growth. The Queensland government will certainly be hoping that their “jobs Budget” earlier this week can have the impact on jobs creation it promises.
Regional jobs data for May will be released next Thursday. At this time we will be updating the Conus Trend Regional Jobs data sets as well as releasing our new Conus Industry Trend Regional data based on the quarterly ABS industry employment data for the May quarter.