The number of people employed in Australia rose to 12.671 million over the year-ended October 2018, a rise of 2.5% compared to the prior year. An additional 32,800 people were employed in October than in September, with the unemployment rate stable at 5.0% in October.
As the chart below shows, the number of people in employment has been growing steadily for some time.
To go straight to the dashboard and take a closer look at the data, click here.
There are some important signals in the details of the latest employment data. Perhaps most surprising – and maybe most welcome – is the creation of approximately 85,000 jobs in the manufacturing sector over the year-ended August 2018.
As David Marin-Guzman wrote in the Australian Financial Review on 1st November, the growth has returned manufacturing employment to 2010 levels and accounting for 7.6% of total employment (>956,000 jobs). As Marin-Guzman reported, most of the jobs appear to be in advanced and higher-technology manufacturing, servicing an increasingly global customer base. The only potential challenge to the export trend could be the depreciated Australian dollar, but higher-value exports like manufactured goods are less elastic than resource commodities.
On the other side of the employment ledger, unemployment data shows that the 5.0% unemployment rate amounts to 672,100 people, which was 4,600 people more than a month before, but most importantly, was 4.9% lower than a year before. This can be seen in the second chart, below.
To go straight to the dashboard and take a closer look at the data, click here.
Overall, Australia’s employment data is positive, and heading in the right direction. If there are challenges, they are probably in the labour underutilization rate and of course, in stagnating wages growth.
The labour underutilization rate – a combination of the unemployment rate and the underemployment rate – was tracking at 8.7% in October 2018. This was exactly the same, as the chart below shows, as October 2017. The implication is that Australia’s employment growth of the last year is a result of a higher population, more than anything else.
At these low unemployment levels, it is likely that the labour underutilization rate will remain challenging. Pressing it lower will be difficult, but is likely to be important in the generation of future economic growth.
