The Australia Bureau of Statistics released its May Labour Force Key Statistics. Australian employment rose, but the growth was slower than expected. Job gains were led by increases in part-time work while the jobless rate ticked down to its lowest since November at 5.4 per cent.
The Numbers
12,000: The Australian economy added 12,000 jobs in May.
5.4%: The Australian unemployment rate decreased to 5.4 per cent.
65.5%: Labour force participation decreased to 65.5 per cent.
+6: According to the NAB, the business confidence index fell to +6 index points.
Upside
There was a net job gain of 12,000 in May which continues the trend of monthly job growth. Australia’s annual job growth of about 3 percent was nearly double the U.S. rate of job creation of 1.6 percent. Since May 2017, full-time employment has increased by 178,800, and part-time employment has increased by 125,100.
The labour force participation rate decreased in May but is still near historic highs with more women and senior citizens entering the workforce. In seasonally adjusted terms, the largest increase in employment was in Victoria (up 22,100), followed by Queensland (up 5,000), and New South Wales (up 2,800). The only increase in the seasonally adjusted unemployment rate was in Tasmania (up 0.5 per cent).
Downside
The job gains in May still fell 6,000 short of the 18,000 expected increase. The net increase was only possible due to a surge in part-time jobs that offset a decrease in full-time employment. The business confidence index fell to +6 – the level of its long-term average. Wages continue to grow at a slow pace which is causing concern about the possible negative impact this will have on the economy as a whole.
The Unknown
The Fair Work Commission raised the minimum wage by 2.4 per cent to $672.70 a week. This will mean an extra $15.80 per week for the 1.8 million workers who are paid the minimum wage in Australia. The increase takes effect on July 1 and equates to a minimum hourly rate of $17.70. It is unclear what the impact of this increase will be on the unemployment rate or the stagnation in wage increases.
