Jobs growth strong

EMPLOYMENT growth in August was twice as high as expected, keeping the nation’s unemployment rate steady at 5.3 per cent for the second month in a row.

The number of people with a job leapt by a better-than-expected 44,000, figures from the Australian Bureau of Statistics show, with underemployment decreasing 0.3 points to 8.1 per cent.

CommSec chief economist Craig James says the figures show the job market remains in strong shape.

“The jobless rate is sitting near six-year lows and there is good scope for it to fall further,” he said.

The latest data from Seek also shows job ads are up 5.4 per cent on a year ago, and the latest NAB business survey is also predicted stronger employment growth in the coming months.

But Mr James warned the proportion of people in jobs or looking for work was only a “smidgen” below all-time highs.

The official participation rate for August — the percentage of people in work, looking for work, or ready to work — increased slightly to 65.7 per cent, from 65.6 per cent the previous month.

CommSec expects the Reserve Bank’s interest rate to remain unchanged at a record low of 1.5 per cent, until later in 2019.

The Australian Chamber of Commerce’s chief economist, Adam Carr, said underemployment would need to come down much further before there was an uptick in wages growth. Underemployment fell to 8.1 per cent in August, the best result in four years, he said, but it needed to fall into the six per cent range to get back to pre- global financial crisis levels.

“We are going to need to see a few more like this before the RBA starts thinking of a rate hike,” Mr Carr said yesterday..

RBC chief economist SuLin Ong warned residential construction and household consumption, which she said had driven economic activity during the first half of the fi- nancial year, were likely to soften into 2019.

“Increased uncertainty over global growth and the domestic policy outlook had already weighed on business confidence, which has just slipped below its long- run average for the first time since mid-2016” Ms Ong said, adding it could impact on hiring intentions.

“Ample slack remains in the labour market.”

The Aussie dollar was buoyed slightly by the figures, peaking at 72 US cents yesterday.