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5d ago

May Jobs Bounce Masks Weak Internals and Big April Revision

The mixed labour data leave the Reserve Bank's August decision finely balanced because stronger household spending and persistent core inflation keep further rate rises possible.

Barista Claudio Chimisso prepares a coffee at Bay Ten Espresso, a cafe that has struggled with filling staff job openings in recent months due to a worker shortage according to its owner, in Sydney, Australia, August 31, 2022. REUTERS/Loren Elliott
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Unemployment figures is more bad news for the RBA.
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Overview

  • The Australian Bureau of Statistics package published Thursday, June 25, showed employment rose 40,300 and the unemployment rate fell to 4.4 percent.
  • The ABS revised April sharply lower from minus 18,600 to minus 40,700 which makes the two‑month April–May average essentially flat and dulls the May headline rebound.
  • Most of May's gain was in part‑time work with 35,200 jobs added while full‑time jobs rose only 5,200 and monthly hours worked fell 1.1 percent, signaling weaker underlying demand.
  • Job vacancies fell 2.1 percent in the May quarter and household spending jumped 1.3 percent in May, the latter acting as a hawkish counterweight by showing consumers are still spending.
  • Taken together the data point to gradual softening with material spare labour capacity (broad underutilisation near 10.2 percent) and leave the RBA likely to wait for clearer follow‑up data, including the June CPI, before moving on rates.