Unemployment steady at 5.2% after June cut

Australia’s unemployment rate remained at a seasonally adjusted 5.2 per cent in June as an election-related jobs boost receded and the effect of cash rate cuts were yet to materialise.

The number of employed persons rose by a net 500 to 12.87 million during the month, according to Thursday’s data from the Australian Bureau of Statistics, with a 21,100 increase in people with full-time work offsetting a 20,600 decrease in people with part-time work.

The participation rate remained steady at 66 per cent, and underemployment dropped from 8.6 per cent to 8.2 per cent thanks to the boost in full time work.

Analysts expected the overall jobless rate to remain steady in the first read on the labour market since the Reserve Bank of Australia cut rates.

BIS Oxford economist Sean Langcake said the RBA would look for further employment growth in the coming months, and for the unemployment and underemployment rates to go down, which would ultimately encourage wage growth.

“With people continuing to enter the labour market and or seek more hours than they currently work, there is very little supply side pressure on wages,” Mr Langcake said.

“And with labour productivity falling firms cannot sustainably increase wages for workers without reducing their profit margins.”

NAB economist Kaixin Owyong noted the third consecutive 5.2 per cent monthly unemployment result mean the RBA would be forced to lift its unemployment rate forecast track in August.

“Although we don’t think that will prompt an immediate third rate cut,” Ms Owyong said.

“Barring a surprisingly weak inflation print in two weeks, we continue to forecast another rate cut … in November, albeit with risk of an earlier move.”

The Reserve Bank has left the door open for a third rate cut by Christmas to a new record-low 0.75 per cent as it seeks to eat into spare capacity and stimulate economic growth.

In seasonally adjusted terms, the largest decrease in employment numbers for June came in NSW, down by 17,400, followed by Queensland (down 8,200), South Australia (down 4,700) and Victoria (down 4,100).

The only monthly increase was a 13,800 rise in employed people in Western Australia.

The ACT retains the nation’s lowest unemployment rate with 3.4 per cent, followed by NSW at 4.5 per cent, the Northern Territory with 4.6 per cent, and Victoria with 4.7 per cent.

Seasonally adjusted monthly hours worked in all jobs decreased by 100,000 hours in June while the employment to population ratio decreased by 0.1 basis points to 62.5 per cent.

The Australian dollar jumped slightly after the data’s release from 70.21 US cents to 70.26 US cents and had eased to 70.19 US cents by 1153 AEST.

AAP

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