In a note to investors, AMP Capital chief economist Shane Oliver noted that “the monthly jobs numbers are messy”, but added that the figures remain healthy despite weak year-on-year full-time jobs growth.
“Annual jobs growth has slowed from an unsustainable 3 per cent year on year late last year, but is still solid at 1.5 per cent year on year,” he added.
Mr Oliver said the “continuing downtrend” in the unemployment rate was a positive sign, though cautioned that “it’s not quite as strong as it looks because full-time jobs growth is weak and the fall in the unemployment rate has been exaggerated by weaker participation”.
Regardless, Mr Oliver noted that low wage growth is likely to help drive increased employment.
“Forward-looking indicators of jobs growth, including the ANZ job vacancy survey and employment intentions in the NAB business survey, point to solid employment growth,” he said.
The Reserve Bank of Australia is likely to view the August job figures as a neutral to the cash rate decision, Mr Oliver said.
“Our view remains that the RBA will cut rates again to further reduce the downside risks to inflation and maintain downwards pressure on the value of the Australian dollar, but with economic growth holding up very well this is a close call and is now very dependent on a lower than expected September quarter inflation outcome,” he said.
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