AUSTRALIA DATA: Steady Jobs Market Means RBA Can Hold To Reduce Inflation

After softer August/September prints, the labour market normalised in October in line with the RBA’s view that “labour market conditions remain a little tight”. The recent trend, if sustained, is likely to keep rates on hold given the Q3 increase in price pressures and uncertainty over policy restricitiveness.

• Much of the October data was in line with the Q3 average consistent with a stable labour market, looking through the monthly volatility.
• The October unemployment rate fell 0.2pp to 4.3% in line with Q3’s 4.3%. The number of unemployed fell 17k bringing the 3-month average to +5k (Q3 +7.2k).

Australia unemployment rate %

Source: MNI - Market News/ABS

• Employment rose 42.2k in October, the highest monthly gain since April, with the annual rate rising to 1.6% y/y from 1.3% y/y. It rose 1% 3m/3m average annualised in line with the rate in Q3.
• The balance shifted towards full-time (FT) jobs in October rising 55.3k compared with part-time (PT) falling 13.1k but in terms of 3-monthly growth, PT is outperforming rising 2.1% annualised compared to 0.5%.
• Firms may have increased the hours of their existing PT staff rather than hiring new ones in October as their hours rose 0.7% m/m to be up 4.7% 3m/3m saar, contributing to the 0.2pp fall in underemployment to 5.7%. FT rose 0.5% m/m but falling 0.6% 3m/3m saar.
• Labour force growth was stable at 1.9% y/y with the participation rate holding at 67% around where it has been since April and the employment ratio at 64.0% for the third straight month.

Australia employment 3m/3m average annualised %

Source: MNI - Market News/ABS