Australia’s seasonally-adjusted unemployment rate remained steady at 5.4% in January, the Australian Bureau of Statistics says.
It was better than economists’ expectations of a small rise to 5.5%. The result will be noted by the Reserve Bank as it starts thinking ahead to its March 5 monetary policy meeting.
The economy added a further 10,400 jobs over the month with total employment at 11,549,100.
The increase in employment was driven by increased part-time employment, up 20,200 people to 3,450,700 and was offset by decreased full-time employment, down 9,800 to 8,098,400 people.
The increase in total employment was mainly driven by an increase in female part-time employment.
The number of people unemployed increased by 2,000 people to 659,600 in January.
The ABS reported a seasonally adjusted labour force participation rate decrease of 0.1 percentage points to 65% in January.
CommSec economist Savanth Sebastian says there is “something for everyone in the latest jobs data”.
“The optimists could focus on the rise in overall employment and conclude all is fine. The pessimists would look at the third consecutive fall in full-time jobs coupled with the fall in hours worked and conclude something more concerning,” he says.
“What is clear is the job market isn’t shooting the lights out but by no means is unemployment soaring. In a big picture sense the job market is in a holding pattern with a modest degree of softening.
“Yes, it was encouraging that employment grew but more forward looking indicators like job advertisements have suggested that further labour market gains may be more circumspect. In fact internet and newspaper job advertisements have fallen for 11 consecutive months, suggesting job growth is likely to flat line in coming months,” he says.
“In a perverse way the unemployment rate is holding steady because more people gave up the search for work.
“Over the past year the missing ingredient in the domestic economy has been confidence, however there are anecdotal signs that there is an improvement in confidence. Rate cuts, healthy house prices and rising share markets should provide some level of encouragement to policymakers, households and businesses.
“The rate cuts in recent times will help to support activity in coming months and continue to provide businesses with a more breathing space – especially given that trading conditions are difficult,” he says.
This piece was first published on Property Observer.