Employment conditions at record high

Employment conditions at record high

Jobless rate ticks up to 5.6 per cent

Figures from the Australian Bureau of Statistics show that the country's monthly unemployment rate has hovered at the 5.5% level since May previous year.

The Australian Bureau of Statistics workforce report this morning shows that WA's jobless rate fell to 6.5 per cent in April, down from 6.9 per cent in March. Full-time employment increased 32,700 to 8,543,400 and part-time employment decreased 10,000 to 3,957,700.

The participation rate climbed to 65.6 percent, near levels seen in early 2011, as more women entered the labour force.

Similarly, the separate Quarterly Business Survey employment index - which utilises a larger sample - is also consistent with robust jobs growth.

So what gives? Isn't booming employment growth supposed to lead to lower unemployment?

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Over the past year, trend employment increased by 355,000 persons or 2.9 per cent, which was above the average year-on-year growth over the past 20 years (2.0 per cent).

"We expect the wage growth will remain below 2.5 percent throughout this year and next", said Kate Hickie, Sydney-based economist at Capital Economics.

With labour market slack still quite high, particularly when accounting for broader measures of unemployment, it is little surprise that wage growth remains subdued. The unemployment rate in New South Wales and Victoria, at 4.9% and 5.3% respectively, sits well below that of the other states.

"This will keep a lid on wages growth and price inflation, and will keep the RBA on the sidelines until at least the December quarter 2019".

Monthly hours worked in all jobs increased 19.4 million hours (1.11%) to 1,764.0 million hours. By comparison, the unemployment rate in the two mining states, Queensland and Western Australia jumped to 6.3% and 6.4% in April.

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