The latest read on Australia's labour market is due today, with the April survey scheduled for 1130 AEST. Solid employment growth since late last year has kept the unemployment rate in the low 4% range, supporting the RBA's assessment that labour market conditions remain tight. That has been cited by the RBA as a key factor as it has hiked the cash rate three times this year. However, with the cash rate now seen as 'somewhat restrictive', the May meeting minutes released earlier this week noted that the Board is increasingly recognising there are rising risks to the employment side of its dual mandate.
April preview: Steady as it goes
Labour market conditions are broadly expected to have been little changed in April. The potential headwinds to hiring from RBA rate hikes and the Middle East conflict are likely to take a while longer to show. Markets go into today's report expecting employment to rise by 17.5k, around a 10-28k forecast range. The unemployment rate is expected to remain at 4.3% for the third month in succession, with estimates ranging from 4.2% to 4.4%.
Recent form shows that employment (green line in chart below) has surprised to the upside of expectations (yellow line) in three out of the last 4 prints - though the previous report for March was a modest downside surprise.
March recap: Solid employment growth holds unemployment steady
The labour market delivered a 17.9k increase in employment in March, just short of the 20k consensus but enough to hold the unemployment rate at 4.3%. All of the increase in employment came in the full time segment (52.5k) as part time fell (-34.6k). This brought the total increase in employment over the quarter to a solid 93.1k, tracking at an annualised pace of around 2.5%.
A slight decline in labour force participation to 66.8% played a role in the unemployment rate holding at 4.3%. Still, the unemployment rate averaged 4.2% in the quarter. Underemployment stood at 5.9% in March, unchanged since the start of the year, while total underutilisation was 10.2%.
Hours worked posted at 0.5% rise in March, more than rebounding from a decline in February (-0.2%), with base effects lifting annual growth to 2.5%. Quarterly hours increased by 0.9%, up from a 0.6% gain in the December quarter.
