Big surge in employment
Rate rise deemed unlikely amid stagnant wages
EMPLOYMENT figures for June rose by their most for this year as firms took on more fulltime workers, yet the jobless rate remains steady as more people entered the labour force in a trend that has curbed much- needed wage gains.
Figures from the Australian Bureau of Statistics released yesterday showed 50,900 net new jobs were added in June, well past the 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 big 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, just a tick below the all- time high, as more women entered the labour force. With labour supply still 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 aboveaverage 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 2019.
A large portion of the gains in employment over recent years has been in the health and social assistance industry, sectors that have high female participation.
More recently the fastest growth has been in professional, scientific and technical services – everything from architecture to engineering, computer systems, law and accountancy.
This sector now has more than 1.1 million jobs, making it the fourth- largest employer after health, retail and accommodation and food services.
Prime Minister Malcolm Turnbull ( pictured) welcomed the result. “We are seeing a real rise in confidence and investment and in jobs growth across the country,” he said in Sydney yesterday.