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Yesterday’s release of the Feb Labour Force data from the ABS seemed to suggest that, just as the growth in Australian jobs appears to have stabilised, there might finally be some better news for Queensland.
The national data showed an additional 4,600 (seasonally adjusted) were added to the number employed with the unemployment rate dipping to 4.9% (its lowest level in almost 8 years). With the modest employment growth came a downward revision to Jan’s numbers so we need to look to the Participation Rate to see the reason for the unemployment rate decline; it fell to 65.6. The Trend data (always our preferred measure) showed employment growth stable at 2.3% pa with 20,600 added to employment. The Trend unemployment rate remained at 5.0%, where it has sat for the past three months. While employment growth remains acceptable we should note that in the past 12 months the rate of growth has fallen from 3.3% pa to 2.3%. As the chart below makes clear, it is beginning to look like the rapid improvement in the Australian labour market may be running out of some of its steam.
Given the RBA’s position of citing strong employment growth and a low unemployment rate as one of the major factors staying its hand on any rate cuts, we might reasonably ask how would that have to change for the RBA to countenance a cut? In our view an increase in the Trend rate of unemployment witnessed across two consecutive months would be enough of a signal for the RBA to consider a move. This month saw the Trend unemployment rate edge up…when we consider it to 3 decimal places!
In Queensland there was a brighter picture (finally) with Trend employment up 4,100 at an annual rate of 1.2%. While this remains slower than the national pace it is accelerating while the nation slows. The headline, seasonally adjusted unemployment rate dropped sharply to 5.4% on the back of a very sharp drop in participation. The Trend unemployment rate dropped to 5.7%, its lowest level since May 2012.
One of our favourite indicators in the labour market is average hours worked per capita of working age population. This “sees through” issues around participation rate changes and the full-time/part-time split and instead focuses on how much work is actually getting done per person…whether they are working, unemployed or not in the labour force. This month we see the national figure drop to 86.28 hours (5th consecutive month of decline) while in Queensland it increased to 87.57 hours (6th month of consecutive increase).
We should note that the ABS collection of data in Townsville following the flood event was compromised and as a result, while the ABS have imputed results for Townsville into the State and National data, these may be subject to revision in coming months. Unfortunately the ABS will not be doing the same when it comes to next week’s regional labour force data (released next Thursday) and we will not be supplied with any data for Townsville (and therefore also Rest of Queensland). We will be updating our own Conus/CBC Staff Selection Regional Employment Trend series on Thursday but we too will have to ignore Townsville and the Rest of Queensland until the March data is available.
We are proud to have CBC Staff Selection as supporters of the Conus/CBC Staff Selection Trend Employment and Jobseeker data series
March 21st, 2019 at 10:29 pm
Pete the situation with Townsville must spark some discussion in the ABS on the way in which they collect their data. Surely in 2019 there is a better way of data collection than calling someone on the phone every month and asking a series of core questions that capture a one week period in that month, seems as antiquated as one could imagine given the technology available today. Thanks
March 21st, 2019 at 11:07 pm
It’s a very good point Glen and one that gets to the issue of resourcing for the ABS when it comes to regional level data. Having spoken to the ABS about this in the past, while they recognise the issue there appears to be no solution in sight. Thanks for the comment. Pete
March 22nd, 2019 at 8:20 am
Great analysis Pete. Thanks.