You are here
Australia jobless rate hits near four-year low, wages still lag
[SYDNEY] Australian employment rose for a 13th straight month in October, the longest stretch of gains since the early 1990s, while the jobless rate dipped to its lowest since early 2013.
Thursday's figures from the Australian Bureau of Statistics showed 3,700 net new jobs were eked out in October. That was short of forecasts of a 17,500 rise, but September was revised up to a solid increase of 26,600.
The detail was also upbeat with full-time jobs climbing 24,300, bringing gains for the year to a blistering 298,000.
The jobless rate dipped one tenth of a percentage point to 5.4 per cent, under forecasts and the lowest since February 2013.
Yet while firms might be scooping up workers they are not so keen to pay them more, leaving wage growth near record lows and putting an unwelcome cap on consumer spending and inflation.
"Despite strong jobs growth, there is still plenty of slack in the labour market," said CBA senior economist John Peters.
"This slack will need to be substantially reduced before wage pressures crank up," he added.
"In this environment, talk of rate hikes over the next year is unrealistic."
That outlook meant the jobs data had only a limited impact on financial markets, with the local dollar up 0.1 per cent at US$0.7594.
Interest rate futures are not fully priced for a hike in the 1.5 per cent cash rate until early 2019.
The scrooge-like pace of wage rises is a major reason the Reserve Bank of Australia (RBA) recently forecast core inflation would not reach the floor of its 2 to 3 per cent target band until early 2019, a year later than previously hoped.
Figures out on Wednesday showed annual wage growth edged up to 2 per cent in the third quarter, but missed forecasts of 2.2 per cent and were only a sliver above inflation at 1.8 per cent.
And that tiny pick-up owed much to a relatively generous 3.3 per cent hike in the minimum wage which was forced on reluctant employers by the government regulator.