Employment data soft but unemployment rate falls

Posted on June 14, 2018 by Pete Faulkner - Jobs, QLD, Uncategorized

Today’s labour force data for May was somewhat below market expectations. Seasonally adjusted employment rose by 12,000 (and April was revised weaker) but all the growth came in part-time employment with full-time dropping 20,600. Over the course for the past year employment is now up 303,900 but full-time has increased by just 178,800. With participation dropping from near-record highs to 65.5 we actually saw an unexpected decline in the headline unemployment rate to 5.4% (from 5.6%).

The Trend series showed an increase of 15,900 in employment with the unemployment rate stable at 5.5%. Trend employment growth now sits at 2.6% for the year (down from 2.8% last month).

While many will point to the decline in the participation rate in an effort to downplay the drop in the unemployment rate, we should note that participation has come off only slightly from near-record levels. The number unemployed fell by 26,900 this month.

We saw a similar pattern in Queensland where employment was up a seasonally adjusted 5,000 but full-time employment dropped by 15,000. Again a fall in participation resulted in the headline unemployment rate dropping to 6.2% (from 6.5%). Employment is up 64,900 for the year but only 36,100 of that has come in the form of full-time employment. The Trend series showed employment up 1,500 with full-time dipping 3,500. Trend employment growth now stands at 2.9% Trend (down from 3.4% last month) or 2.7% seasonally adjusted. This week’s Budget had penciled in an unemployment rate around 6.25% and employment growth at 2.75%…at this stage those numbers look about right.

Hours worked per member of the working aged population (a measure which essentially adjusts for the full-time/part-time split as well as shifts in participation) sees the rate across the nation stable at about 86.4 suggesting the strength in labour force we saw emerging throughout 2017 seems to have rather run out of steam.

In Queensland we see the measure sliding worryingly back (now down to 86.9) having run up as far as 88.3 at the end of last year. This is suggesting that the Queensland labour market remains relatively weak despite the string of impressive employment growth figures through the early part of this year.