Jobless rate remains stuck at 5.2 per cent
Job ads have fallen by more than 60 per cent amid the worsening coronavirus outbreak. Photo: Getty
The addition of 41,000 people to Australia’s workforce failed to shift the jobless rate in July, with unemployment remaining at seasonally adjusted 5.2 per cent for a fourth consecutive month.
The number of people employed rose to 12.91 million in July, according to Thursday’s data from the Australian Bureau of Statistics.
That included a better-than-expected 35,500 increase in people with full-time work and a 6,700 increase in people with part-time work.
But few inroads have been made into labour market slack, with underemployment rising 0.2 basis points to 8.4 per cent, suggesting more part-time workers want longer hours of work.
Economists had expected the jobless rate to remain unchanged amid subdued wages, low household consumption, and elevated underemployment.
NAB economist Kaixin Owyong said it was clear further economic stimulus was needed from the Reserve Bank and said another rate cut to 0.75 per cent could be expected by November.
“While the ongoing strength in employment will be reassuring for the RBA, these data suggest that spare capacity remains in the labour market,” Ms Owyong said.
“Given the RBA’s focus on reducing spare capacity, NAB continues to believe further stimulus will be needed.”
Thursday’s data follows hot on the heels of stagnant June quarter wage figures, which on Wednesday showed year-on-year wages growth was stuck in a range of 2.3 per cent and 2.4 per cent for a fourth consecutive quarter.
In particular, private sector wages continued to drag during the quarter.
BIS Oxford economist Sarah Hunter said sustained strong jobs growth will be needed to absorb the remaining spare capacity and generate pressure on wages.
“[Thursday’s data] also highlights that the amount of spare capacity in the market is much larger than previously thought – labour supply has easily responded to the strong growth in demand from firms over the last two years, and there are no signs yet of a general shortage of workers,” Dr Hunter said.
Seasonally adjusted monthly hours worked in all jobs increased by 8.8 million hours – 0.5 per cent – in July to 1.78 billion hours.
The unemployment rate increased by 0.9 points to 6.9 per cent in South Australia, and 0.2 points to 5.9 per cent in Western Australia.
Decreases were recorded in Tasmania (down 0.8 points to 6.0 per cent), NSW (down 0.2 points to 4.4 per cent) and Queensland (down 0.1 points to 6.4 per cent).
The dollar spiked from 67.55 US cents to 67.77 US cents immediately after the data’s release, and was buying 67.75 US cents at 1205 AEST.