Labour market strengthens in July

Labour market strengthens in July

Employment figures released yesterday by the Australian Bureau of Statistics (ABS) show trend employment has grown by 11,800 people, or 0.1 per cent, over July.

Much of the growth came in the form of part-time employment, which accounted for 10,600 people, the ABS said.

ABS labour and income branch program manager Jacqui Jones said these figures demonstrate part-time employment growth’s “continued strength”.

“Over the past six months, there has been an increase of 82,600 people working part-time, compared with a 21,600 decrease in those working full-time,” she said.

The low figures for full-time employment suggest that overall growth may not be “quite as strong as it looks”, AMP Capital chief economist Shane Oliver cautioned, noting that hours worked only grew 1.1 per cent year-on-year, where overall jobs growth for the same period increased 1.9 per cent.

Mr Oliver said a further cut to the RBA’s cash rate is still likely for November as “jobs growth alone” hasn’t formed the basis for RBA decisions this year.

“The reason for rate cuts has been around the downside risks to inflation and on this front while jobs growth has been solid, there is still significant slack in the labour market with labour underutilisation, i.e. unemployment plus underemployment, remaining very high at 14.2 per cent and this is putting downwards pressure on wages growth,” he said.

Looking forward, Mr Oliver said labour market indicators “have lost a bit of momentum”, though “reasonable” growth is still likely.

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