Jobs grow by 51,000

Wage gains on hold but ...

AUSTRALIAN employment surged by the most this year in June as firms took on more full-time workers, yet the jobless rate held steady as more people entered the labour force in a trend that has curbed much-needed wage gains.

Australian Bureau of Statistics figures released yesterday showed 50,900 net new jobs were added in June, well past expectations of 17,000.

There were 41,200 full-time positions created while 9700 part-time jobs were added.

It was the largest monthly gain since November and will be a relief to policy makers after a run of softer months.

Annual jobs growth also picked up to 2.8 per cent, well ahead of the US pace of job creation of 1.6 per cent. The unemployment rate held steady at 5.4 per cent, but only because more people went looking for work.

The participation rate jumped to 65.7 per cent, a tick below the all-time high, as more women entered the labour force.

With labour supply expanding to meet demand, there has been less upward pressure on wages and inflation, and thus no near-term trigger for a rise in interest rates from the Reserve Bank of Australia.

“This report will give them a bit of confidence that some of the weakness we saw in employment earlier this year was temporary,” said RBC senior economist Su-Lin Ong.

“Having said that, there is still a lot of slack in the market.

“You still have to see ongoing above trend and above average job growth to absorb that spare capacity, and you need more prints of this magnitude to ease the slack and lift wages growth.”

The RBA has held rates at a record low 1.5 per cent for almost two years and markets imply scant chance of a move until well into next year.

The flat outlook limited gains in the Aussie dollar, which still jumped from just below 74 US cents.

A large portion of the gains in employment in recent years have been in the health and social assistance industry, sectors with high female participation.

Recently the fastest growth has been in professional, scientific and technical services.

The outlook for employment is also upbeat if leading indicators of labour demand are to be believed.

Particularly promising has been the ABS series on job vacancies, which surged 24 per cent in the year to May to reach a peak of 236,000.

The minutes of the RBA’s July board meeting emphasised that vacancies had reached the highest level as a share of the labour force since the series started in the 1970s.

As a result, board members “noted that wage pressures had been building in some parts of the economy but had not yet become broadly based”.

AAP REUTERS