The Australian jobs market is slowing, as the Reserve Bank feared, but don’t expect any more rate cuts because the central bank reckons it has done enough for the time being and wants to see what happens when the $8 billion in tax returns start hitting the shops.
The June monthly Labour Force figures from the Australian Bureau of Statistics show that jobs growth slowed to a proverbial crawl in the month – up to a seasonally adjusted 500 when the market had been expecting upwards of 10,000.
The jobless rate remained steady on 5.2%, seasonally adjusted, but in a worrying development the trend jobless rate rose to 5.2% and the May rate was revised up to 5.2% from the originally reported 5.1%.
In fact, the June trend jobless rate was actually 5.24% – another 100th of a point and the rate would have been rounded up to 5.3% which would have really triggered an outbreak of nerves at the RBA, the Morrison Government and in the markets.
Seasonally adjusted monthly hours worked in all jobs fell by 100,000 hours in June while the employment to population ratio decreased by 0.1 basis points to 62.5%.
The fall in hours is another sign the strength of the jobs market is on the wane.
In seasonally adjusted terms, the largest decrease in employment numbers for June came in NSW, down by 17,400, followed by Queensland (down 8,200), South Australia (down 4,700) and Victoria (down 4,100).
The only monthly increase was a 13,800 rise in employed people in Western Australia.
The ACT retains the nation’s lowest unemployment rate with 3.4%, followed by NSW at 4.5% the Northern Territory with 4.6%, and Victoria with 4.7%.
At 5.2% the trend jobless rate is now at its highest point since August last year despite solid growth in total employment. Of the 248,300 jobs created over the past year, 84% have been in Victoria and NSW and most have been in welfare and services such as health and the NDIS.
In trend terms, 329,000 jobs were created in the year to June (that’s the 2018-19 financial year), down from 333,000 in the year to May.
The growth rate was 2.6%, down from 2.7% against the long term average of 2.0%. Its that slowdown, the second in a year and the fall in hours worked that tells us the labour market is turning.
While the country created 155,000 jobs in the June half-year, the number of unemployed has also swelled by 45,000.
The nation generated 21,100 full-time jobs in June, however, they were almost totally offset by a 20,600 drop in the number of people in part-time work (seasonally adjusted). That’s standing still, not growing.