Job market in good shape ahead of virus crisis: CommSec's Craig James

EXPERT OBSERVER

Employment rose by 26,700 jobs in February – after increasing by 12,900 in January (previously estimated at +13,500). Full-time jobs rose by 6,700 with part-time jobs up by 20,000. Economists had tipped an increase in total jobs of around 8,000 and a jobless rate near 5.3 per cent.

The unemployment rate fell from 5.29 per cent (to two decimal places) in January to 5.10 per cent in February in seasonally adjusted terms. In trend terms, the jobless rate was steady at 5.1 per cent in February.

Hours worked fell by 3.0 per cent in February, but were up by 0.5 per cent over the year. In trend terms, hours worked were up by 0.8 per cent on the year.

Participation rate: The participation rate eased from 66.1 per cent to 66.0 per cent in seasonally adjusted terms. In trend terms the participation rate was steady at 66.0 per cent.

Unemployment across states in February: NSW 4.6 per cent (January 4.5 per cent); Victoria 5.3 per cent (5.4 per cent); Queensland 5.6 per cent (6.2 per cent); South Australia 5.8 per cent (5.7 per cent); Western Australia 5.2 per cent (5.7 per cent); Tasmania 5.0 per cent (5.7 per cent). In trend terms, Northern Territory 5.5 per cent (5.5 per cent); ACT 2.9 per cent (3.0 per cent).

What does it all mean?

To some extent today's data is ancient history. The COVID-19 coronavirus crisis really started to impact the broader economy in March. The impact of the virus in February was largely on tourism-dependent businesses and regions, and on the education sector. However the February jobs data would have also incorporated the effects of the bushfires that impacted so many of the country's regions..

That said, there was a positive lead for today's jobs figures from the January Department of Employment skilled vacancies series. And while a lot has happened over March, the jobs data for February – just like the retail trade figures – were indeed encouraging. And especially of encouragement was data showing the female jobless rate equalling the lowest rate in 11 years. And while monthly job figures at a state level are volatile, Tasmania's jobless rate is the lowest for over 8 years with Western Australia's jobless rate the lowest rate in over 5 years. The ACT's trend jobless rate is the lowest in 11 years.

The Bureau of Statistics "confirmed that the disruption from the bushfires did not have a notable impact on key headline statistics".

The outlook for the job market is challenging. While supermarkets, grocery wholesalers and transport groups are looking to hire staff, airlines, hospitality, sporting and cultural sectors will struggle to retain workers. So the next Federal Government support package will be super-important. It will be important for the Government to do all that it takes to keep Aussies in jobs.

It serves no value – and indeed it may be misleading – to try and forecast in the current environment. Much will depend on how quickly active coronavirus cases peak in Australia, how aggressive State and Federal governments are in supporting businesses and how quickly vaccines and treatments are developed to deal with COVID-19.

There is one thing no Australian should do – underestimate the resilience of the economy. Australia hasn't posted a recession in 28 years, despite all manner of shocks, including the global financial crisis. And while it will be more difficult to avoid a downturn this time, our economy should also bounce back quickly.

CRAIG JAMES is the Chief Economist of CommSec