Australian labour market: Another strong jobs gain in April - ANZ

David Plank, Head of Australian Economics at ANZ, explains that Australian employment was up strongly in April, following on from the very strong result for March. 

Key Quotes

“The full-time/part-time split was somewhat less positive, with full-time jobs falling by 11.6k. The drop in the unemployment rate to 5.7% confirms the overall strength of the report in our view. We think we are likely to see a series of strong employment reports over coming months as the official data closes the gap that had opened up with the strong labour market signals coming from other data. This may act to stem the decline in consumer confidence that has been apparent since the start of the year.”

“Employment rose 37.4k in April, following the 60k gain in March. The strong March and April results follow a number of weak months that were at odds with the robust state of other indicators of the labour market, such as ANZ Job Ads. Within the headline figure the mix of full-time/part-time jobs was a little less favourable, with full-time jobs declining by 11.6k. This drop has to be viewed against the 75k jump in full-time jobs in March, however.’

“Encouragingly the unemployment rate dropped back to 5.7% in April, after it rose to 5.9% in February and remained at that level despite the strong employment gain in March. At 5.7% the unemployment rate is still above its recent cyclical low of 5.6% reached in October and well above the 4.9% level reached in mid-2011.  It is, however, down from the cyclical high of 6.3% last seen in July 2015 – though underemployment remains high.”

“In terms of the states, employment grew in all, except SA where it dropped. The unemployment rate dropped sharply to 4.7% in NSW, was also down in Queensland, WA (sharply) and Tasmania, steady in Victoria (despite strong jobs growth) but rose to 7.3% in SA (its highest level since early 2016). See Figures 4 and 5 for data on the states.”

“Given the strength of labour market indicators from sources such as business confidence and ANZ Job Ads we are not overly surprised by the strength of the April jobs report, even if it was above our forecast. We think this could continue for a while yet, hopefully stemming the trend decline in consumer confidence seen since the start of the year.”