Strong jobs growth matched with record high participation = stubborn unemployment rate

Posted on June 13, 2019 by Pete Faulkner - Jobs, QLD, Uncategorized

The labour force data for May shows employment continuing to grow quite strongly but a move to a record high Particiaption Rate keeps the unemployment rate stubbornly unchanged.

Employment lifted by 42,300 (seasonally adjusted) or 28,400 (Trend) in May; both after significant upwrad revisons to April’s numbers. However, with the participation rate hitting a record new high (66.0) the unemployment rate remains stuck at 5.2% (s.a) and 5.1% (Trend). The rate of employment growth increased to a Trend figure of +2.66% (up from +2.58% in April) which is the fastest in a year.

Queensland saw an increase in employment of 7,800 (s.a) and 6,200 (Trend) but, as was the case nationally, a move up in participation was not reflected in a drop in the unemployment rate which rose to 6.2% (s.a) or remained unchanged at 6.0% (Trend). The Trend employment growth rate also edged higher to +1.87% from +1.69%. The rise in participation in Queensland can be slated to the female cohort; the May data shows female particiaption at an all time high of 61.7.

Our favourite measure of overall labour market strength is total hours worked per capita of working age population as this ‘sees through’ issues regarding particiaption changes and shifts between full and part-time work. Here we see another improvement from 86.62 hrs to 86.65 hrs across Australia, this is the highest reading since Jan 2013. In Queensland this metric fell slightly as full-time work growth has been weak in recent months; May’s figure was 86.45 hrs versus 86.80 hrs in April.

Certainly with the unemployment rate remaining unchanged (actually marginally higher when considered on a Trend basis but marginally lower on the seasonally adjusted basis) the pressure will remain on the RBA to likely move again on rates in coming months.

Next Thursday we will see the regional data released by the ABS at which time we will be updating our Conus/CBC Staff Selection Regional Employment Trend series.