Growth spurt for jobs brings cheer

JOBS growth in August clocked in twice as high as economists 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 the proportion of people underemployed dropping 0.4 percentage points to 8.1 per cent.

Westpac economist Justin Smirk said the number of hours worked was flat, sug- gesting some caution was warranted but that it was a “solid” report card for the jobs market.

George Tharenou, an economist at investment bank UBS, said the figures indicated the labour market was improving, but not rapidly enough to jolt the Reserve Bank into lifting the official cash rate.

“We see rates on hold until 2020,” Mr Tharenou said.

CommSec chief economist Craig James said the figures showed the job market remained in strong shape.

“The jobless rate is sitting near six-year lows, and there is good scope for it to fall fur- ther,” Mr James said.

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

The participation rate for August — broadly the proportion of people in or seeking work — rose slightly, from 65.6 per cent to 65.7 per cent.

CommSec said it expected the RBA to keep the cash rate unchanged until late in 2019.

Australian Chamber of Commerce and Industry chief economist Adam Carr said underemployment would need to come down further before there was an uptick in wage growth. Underemployment was at its lowest in four years, but needed to fall to the 6-per-cent range to get back to pre-global financial crisis levels, he said.

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

RBC chief economist SuLin Ong warned residential construction and household consumption were likely to soften into 2019.

The Aussie dollar climbed slightly after the figures were released, peaking at US72c before settling back at US71.89c late yesterday.