The good news and the bad news on Australian labour markets

Good news: 71,500 jobs were created over the month of February
Bad news: 75% of them were part time roles

The February labour force data published by the ABS earlier this week caught most of us off guard. The number of jobs created was nothing short of spectacular, the rate of unemployment remained steady at 5.4% and the participation rate rose from 65.0% to 65.3% in seasonally adjusted terms. The headline jobs growth figure showed 71,500 new jobs were created across Australia. At face value that’s a pretty impressive number of new jobs – the highest month-on-month number of new jobs since July 2000 (in fact month-on-month jobs growth has only been that high eight previous times across the ABS series which extends back to 1978).

Total jobs created, month to month

At face value the figures look very positive, however drilling down shows that the vast majority of new jobs were part time. 75% of jobs growth was for part time positions over the month and over the past twelve months, 69% of new jobs have been part time roles.

Jobs created full time v part time
The proportion of part time jobs to full time jobs is currently recorded at 32% which is an all time high based on the ABS seasonally adjusted series which extends back to 1978. If we see part time jobs creation continue at this pace it is likely the proportion will increase.

Part time jobs as a percentage of all employed
The labour force utilisation rate was measured at 13.4% in February, unchanged from February the previous year, however the age group showing the highest rate of underutilisation was the youngest age category of 15 to 24 year olds where 27.0% of the working population within this age group is either unemployed or would like to work more hours.

Labouir force underutilisation rate
Another interesting factor to take into account when interpreting the headline labour force data is that 70% of all jobs created over the past year were located in New South Wales and Victoria. Jobs growth is moving away from the mining states. Australia’s third largest state based on population, Queensland, managed to comprise just 9% of the total number of jobs created nationally while Western Australia accounted for 18% of the jobs growth.

Proportion of jobs created
Overall, despite some of the labour market softness that I have highlighted, the recent jobs data should be seen as a positive. Viewed at a macro level, which is generally what Federal policy makers base their decisions on, the labour market is looking quite healthy and surprisingly resilient. The jobless rate is holding firm at the low level of 5.4%, the number of new jobs created over the month was historically high and more people are actively seeking work. The latest labour force data will add to the speculation that the interest rate cutting cycle is either at or approaching completion.

About Tim Lawless

Tim heads up the RP Data research and analytics team, analysing real estate markets, demographics and economic trends across Australia

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