Strongest jobs growth in years: CommSec's Craig James
But if business and consumer confidence lifts in response to the end of political uncertainty, boosting spending, investment and employment, then the jobless rate may trend lower to 5.5 per cent over the next year.
Healthcare is the biggest employer and the sector was the biggest job creator over the past year. Unfortunately the data on employment by industry is still volatile on a quarterly basis. In fact the data suggest that Mining was the biggest job creator over the last three months – a result most would find hard to reconcile. But the big picture story is consistent: Healthcare leads the way.
Employment in the manufacturing sector hit new lows in the latest quarter, shedding just over 42,000 jobs. Manufacturing still remains the sixth largest employer in Australia but it appears set to drop another position in the next year. The good news is that the jobs are being more than made up elsewhere.
What does the data show?
Industry employment:
Employment rose by 78,000 over the three months to August after a gain of 82,800 in the previous three months. It was the strongest back-to-back gain in jobs since late 2010.Employment rose in 10 of the 19 industry sectors. Employment rose most in Mining (up 19,300) followed by Education & Training (up 15,900) and Construction (up 14,000).
In the quarter, the number of jobs fell the most in Professional, Scientific and Technical Services (down 58,700), Manufacturing (down 42,300) and Wholesale Trade (down 17,100).
Healthcare remains the biggest employer with 1.47 million employees (12.4 per cent of the total) followed by Retail Trade (1.21 million jobs or 10.3 per cent) and Construction (1.05 million or 8.9 per cent).
Over the past year, Healthcare added 87,500 jobs, well ahead of Professional, Scientific and Technical Services with a gain of 29,100 jobs.
What is the importance of the report?
The Australian Bureau of Statistics (ABS) provides detailed labour market figures one week after releasing ‘top level’ statistics of employment & unemployment levels across states and territories. The detailed data is useful in identifying broader underlying trends and instructive about the health of the economy.
What are the implications for interest rates and investors?
The Reserve Bank Board minutes noted that demand for labour has improved “particularly in service sectors” with members noting “that spare capacity remained and wage pressures continued to be weak.” In other words, the RBA is in no rush to change rates in either direction.Healthcare will continue to provide opportunities for businesses, consumers and investors in coming months.
Craig James is the chief economist at CommSec.