Data Snapshot: Labour Force - NSW Steals the Show!

• Jobs jumped 50.9k in June, well above the range of consensus forecasts of 5.0-30.0k. It is also the biggest jump in jobs in seven months and driven by a strong rise of 41.2k in full-time jobs, which was also the largest gain in seven months.
• The unemployment rate stayed steady at 5.4%, but that was because more people joined the labour force, preventing a fall in the jobless rate. The participation rate ticked up to 65.7% in June, from 65.6% in May.
• It is an impressive set of numbers, except that when we look at the State-wide detail, much of the rise came from sharp job gains in NSW. Indeed, NSW accounted for over half of all jobs created in June, reflecting strong activity in the NSW economy.
• Victoria has been a standout in recent years, but some of the shine is wearing off. Jobs fell by 6.6k in June. Moreover, Victoria’s jobs growth has taken a step down in 2018. In contrast, NSW’s job market has retained much of its momentum.
• Aggregate average monthly hours worked rose by 0.6% in June. However, the annual pace was subdued at 2.0% in the month. The share of firms reporting skilled labour shortages has been rising. But the close historical relationship between this share and wages growth might no longer hold as tight.
• Therefore, wages growth might continue to recover in Australia as the labour market continues to tighten, but it might remain gradual in nature. Part of the explanation might lie with the rise of “superstar” firms.

 

Please see the attached report for more information.

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