Full-time jobs on the rise

Employment steady but gain in permanent work

AUSTRALIA’S jobless rate remained steady at a seasonally adjusted 5.0 per cent in January, but a jump in full-time employment could reassure the Reserve Bank there is positive underlying momentum in the economy.

The data yesterday from the Australian Bureau of Statistics matched consensus expectations and showed a net increase of 39,100 persons with work, including 65,400 more people in full-time employment and 26,300 fewer people in part-time employment.

The full-time jobs boost knocked the seasonally adjusted underemployment rate down from 8.3 per cent to 8.1 per cent, while the participation rate increased by 0.1 percentage points to 65.7 per cent.

The Australian dollar spiked to 72.06 US cents from 71.63 on the release of the data, but had cooled to 71.96 during midday trade.

BIS Oxford Economics analyst Sarah Hunter said the result was positive, especially the lift in full-time work, but she remained cautious about the economic outlook for the nation.

“Strong employment growth will help to support consumer spending and therefore GDP growth, but households continue to face weak growth in wages and other sources of income,” the analyst said.

“Residential construction is also set to become a bigger drag on momentum as we move through 2019.”

Lacklustre December-quarter wage data on Wednesday tested the narrative on the health of the economy from the RBA, under Governor Philip Lowe (pictured), with analysts pinning hopes on an increase in jobs to stimulate spending amid a housing downturn.

Ms Hunter said a steady unemployment rate would probably see the cash rate kept on hold this year.

“Growth will be strong enough to not require a cut, but not strong enough to warrant a rate rise until the end of 2020 at the earliest,” Ms Hunter said. In seasonally adjusted terms, the largest increase in employment in January was in New South Wales, a 47,200 increase in jobs, followed by Victoria, up 2200, and Western Australia, up 800 persons.

The largest decrease was in Queensland, down 19,900 jobs, followed by South Australia, down 4500.

The seasonally adjusted underemployment rate decreased in all states. The ABS said January’s net movement was underpinned by about 300,000 people entering and leaving employment.