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Australia's jobless rate slips in July but full-time work falters
[SYDNEY] Australia's jobless rate ticked lower in July led by a big bounce in part-time work while full-time employment fell, a mixed result that augurs poorly for wages growth and the course of inflation.
The unemployment rate slipped to 5.6 per cent from an upwardly revised 5.7 per cent in June as 27,900 new jobs were added, the Australian Bureau of Statistics said on Thursday.
But the gain was led solely by a jump of 48,200 in part-time work. Full-time jobs stumbled in July after a strong run recently. They still account for almost all of the gains in employment this year.
The Reserve Bank of Australia (RBA) had welcomed a sharp turnaround in the labour market this year after full-time jobs fell 23,100 in 2016.
But policymakers continue to fret over high spare capacity and its impact on wages growth which is languishing at record lows of 1.9 per cent.
That is also putting downward pressure on inflation which remains below the RBA's two per cent to three per cent target band, forcing the RBA to slash interest rates twice last year to a record low 1.5 per cent. It has stood pat on policy since then.
The underemployment rate, which measures people wanting to work more hours, was still near record highs.
Still, the RBA is confident of a revival with measures of business confidence and conditions at a decade high.
"The past volatility of the data means it pays not to get too excited by strong employment data and not to get too worried by weak data," said Paul Dales, chief economist at Capital Economics.
"The full/part-time split and data on hours worked weren't as encouraging as recently. But the recent improvement in the labour market is an upside risk to our cautious economic growth, inflation and interest rate forecasts."