"[T]oday’s labour force data, coupled with recent modest improvement in other domestic activity indicators, make selling a May rate cut more difficult for the RBA (one wonders if they now wish they had cut in April). Importantly, current evidence casts significant doubt on calls for a follow-up rate cut soon after May – recent job ads data may be telling us that the unemployment rate has already peaked...
Looking through the volatility, the unemployment rate has been broadly stable since mid 2011 and employment is now increasing modestly (Figure 2). The jump in employment in March saw the employment-to-population ratio increase marginally after it had fallen over 2011 (Figure 3). (This ratio is useful as it is largely unaffected by any difficulty the ABS might currently be having with underestimating population growth and, hence, employment growth.)
The share of the adult population in employment (62%) is below its pre-GFC peak but remains high by historical standards. The participation rate also increased in March after a period of relative weakness...
In trend terms, full-time jobs have contributed nearly all of the recent (modest) increase in total employment, reversing the pattern seen in the first half of 2011 (Figure 4). This mix of employment growth is also a sign of a tentative improvement in labour market conditions...
Overall, the sideways movement in the unemployment rate since mid 2011 is consistent with GDP growth being roughly around trend (Figure 5). It is also consistent with the job ads data, which are now showing signs of improvement (see below).
Overall, the sideways movement in the unemployment rate since mid 2011 is consistent with GDP growth being roughly around trend (Figure 5). It is also consistent with the job ads data, which are now showing signs of improvement (see below).
