19 Jul 2018
Employment in Australia grew the most this year in June as businesses employed additional full-time staff, however the jobless rate remained steady as an increase in people joined the workforce, in a trend that has restricted wage gains.
The Australian Bureau of Statistics (ABS) figures unveiled on Thursday showed an additional 50,00 new jobs in June, soaring past the 17,000 forecast. Out of the total, 41,200 were full-time roles.
This is the biggest monthly gain since November last year and comes as something of a reprieve to policymakers after previous softer months.
Furthermore, annual jobs growth rose to 2.8 per cent, streets ahead of the 1.6 per cent rate in the U.S.
The rate of unemployment remained steady at 5.4 per cent, with the participation rate leaping to 65.7 per cent, just under a record high.
As a result of labour supply still rising to cater to demand, there has been less pressure on wages and inflation, therefore not prompting a rate hike from the Reserve Bank of Australia.
RBC senior economist Su-Lin Ong said: “This report will give them a bit of confidence that some of the weakness we saw in employment earlier this year was temporary.
“Having said that, there is still a lot of slack in the market. You still have to see ongoing above trend and above average job growth to absorb that spare capacity, and you need more prints of this magnitude to ease the slack and lift wages growth.”
According to a Reuters report, the Reserve Bank of Australia has maintained interest rates at an all-time low of 1.5 per cent for nearly two years, with markets indicating little chance of a rise until the middle of next year at least.
In recent times, the fastest growth has been for jobs in professional, scientific and technical services.
There are now over 1.1 million jobs within this sector, becoming the fourth biggest after health, retail trade and accommodation and food services.
Board members at the Reserve Bank of Australia “noted that wage pressures had been building in some parts of the economy but had not yet become broadly based.”
According to analysts, until these wage pressures broaden, interest rates will remain at record lows.