Unemployment at 6 percent unexpectedly in early 2016

Unemployment at 6 percent unexpectedly in early 2016
Unemployment at 6 percent unexpectedly in early 2016

Treasurer Scott Morrison noted only yesterday that "the rate of unemployment has been under 6 now for some months."

Not any more, based on the January figures released today.

But trend employment has continued to show strong growth, according to figures released by the Australian Bureau of Statistics (ABS) today. 

"The trend shows that around 302,000 more people were employed in January 2016 than in January 2015 and full-time employment growth was a bit stronger than part-time growth over the year, increasing by 169,800 people," General Manager of ABS' Macroeconomic Statistics Division, Bruce Hockman said.

The increase in employment has contributed to the trend employment to population ratio rising over the year from 60.7 per cent to 61.4 per cent, while the unemployment rate decreased over the year from 6.2 percent to 5.8 percent.

Over the past month, trend employment increased by 19,800 persons to 11,909,900 persons, which equates to a monthly growth rate of 0.17 per cent.

This growth rate was slightly above the monthly average over the past 20 years (0.15 per cent), and continues the recent trend in relatively strong employment growth.  

The trend series smooth the more volatile seasonally adjusted estimates and provide the best measure of the underlying behaviour of the labour market.

The seasonally adjusted number of persons employed decreased by 7,900 in January 2016, while the number of persons unemployed increased by 30,200. 

The seasonally adjusted unemployment rate for January 2016 was 6.0 percent (up 0.2 percentage points) and the seasonally adjusted labour force participation rate was unchanged at 65.2 percent.

The ABS seasonally adjusted monthly hours worked in all jobs series increased by 10.9 million hours (0.7 per cent) to 1,656.0 million hours.

Westpac noted the rise in the unemployment rate to 6% may give the RBA a reason to pause and consider their assessment of the labour market.

"In the most recent Statement on Monetary Policy they stated that the unemployment rate had fallen below 6% and was likely to stay there.

"While one month is not a trend we would suggest that today’s print would make them a little less confident in that assessment," Westpac noted.

Jonathan Chancellor

Jonathan Chancellor

Jonathan Chancellor is one of our authors. Jonathan has been writing about property since the early 1980s and is editor-at-large of Property Observer.

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