Good factor we had the November US client inflation information and the final US Federal Reserve assembly of 2023 this week, with its sturdy trace that there may very effectively be fee cuts subsequent yr — in any other case yesterday’s November labour power information right here might need seen a surge of “fee rise looms” chatter from the same old assortment of native galahs.
Unemployment did rise to an 18-month excessive of three.9%, however the Australian Bureau of Statistics information confirmed that the scale of the Australian workforce surged to a report of 14.257 million (seasonally adjusted) final month, whereas the participation fee hit a brand new all-time excessive of 67.2%, and an additional 61,500 jobs have been added. Some forecasters had pencilled in a fall of seven,000, others an increase of round 5,000 to 11,000. The November surge was on high of the 55,000 or extra in October, though that was put right down to momentary part-time staff being employed for the Voice referendum by the electoral workplace.
With revisions, round 140,000 to 150,000 new jobs have been added since September, when there was an indication of a slowing when solely 7,000 new jobs have been created and the jobless fee was at 3.6%
The broader story is that the roles market is protecting tempo with the excessive stage of migration — our excessive employment-to-population ratio has been maintained for many of 2023. The inevitable decline in participation supposedly due to an ageing workforce simply retains getting postponed — certainly, the reverse retains occurring, which is why unemployment went up in November regardless of the sturdy jobs creation.
Excessive participation is generally a great signal for the economic system and the workforce, however for the time being it’s laborious to keep away from the conclusion that it’s being pushed by households desperately needing a second earnings to afford mortgage repayments.
The ABS additionally thinks the labour market is slowly loosening. Hours labored slowed — down 0.1% or 2 million hours, which does recommend that employers are including workers whereas reducing hours.
“The latest slowdown in hours labored over the previous six months continued into November, with the overall variety of hours labored now round the place it had been again in Might. Nevertheless, this follows very sturdy development throughout late 2022 and early 2023,” the ABS stated in its commentary on the figures.
“The slowing in hours implies that total development charges in employment and hours labored at the moment are comparable over the previous 18 months. The narrowing hole between these two development charges means that the labour market is now much less tight than it has been.”
That’s defined by the surge in immigration and the Australian inhabitants. Separate ABS information on Thursday confirmed the Australian inhabitants topped 26.6 million individuals within the yr to June, an increase of 614,000 with web immigration accounting for 518,100 of that determine. That in flip helps clarify the 441,000 rise within the measurement of the workforce within the yr to November.
The surge in migration has stored feeding employers’ urge for food for staff, even with pay rises at 4% a yr or higher. That in flip has helped enhance the federal price range and the price range deficit. That may change with the anticipated slowdown in migration in coming quarters. However for the time being, the employment market continues to be performing very strongly, whatever the headline figures.