Australia: Unemployment falls to new cycle low – HSBC

Analysts at HSBC note that Australian employment rose by 20k in September (market expected 15k) and over the past six months, jobs growth has averaged 36k a month as annual employment growth stands at 3.1%, up from 2.7% the previous month.

Key Quotes

“Full-time employment rose by 6k in September and was up 3.9% y-o-y. Part-time employment was 14k higher in the month, and up 1.4% y-o-y.”

“The unemployment rate was 5.5%, down from 5.6% the previous month.”

“Total hours worked rose by 0.7% m-o-m. Looking through considerable month-to-month volatility, trend annual growth in hours worked was 2.9%, in line with the previous month.”

“Implications

• Today we saw more evidence that the labour market is tightening up, with strong jobs growth continuing and the unemployment rate falling to a new cycle low of 5.5% in September. The details in the labour force survey have also been positive. Of the 372,000 jobs that have been created over the past year, 316,000 have been full-time jobs, while 56,000 have been part-time jobs. The lift in full-time employment is driving a pick-up in hours worked.  
• The pick-up in the official jobs numbers is in line with the other indicators of the labour market, including job advertisements, the hiring intentions components of the business surveys and the unemployment expectations component of the consumer sentiment surveys. Our summary indicator of labour market conditions, based on these other surveys, suggests continued strong jobs growth. In addition, the latest reading of the ABS job vacancies measure showed y-o-y growth of 15.4% in Q3, which is its fastest pace since 2002.
• Today we also received the Q3 print for the quarterly NAB business survey which showed that business conditions are around their highest level in a decade. Amongst the details, businesses are reporting a sharp jump in their concerns about being able to find 'suitable labour', which is another tell-tale sign that the labour market is tightening up.”