Labour Force Survey — March | By the numbers
- Employment increased by a net 25,700 in seasonally-adjusted terms, well above the 15,000 increase forecast by markets. February's initially reported gain of 4,600 was upwardly revised to 10,700.
- The national unemployment rate lifted, as expected, to 5.0% from 4.9%.
- The underutilisation rate lifted by 0.2ppt to 13.2%, and the underemployment rate increased by 0.1ppt to 8.2%.
- The participation rate lifted by 0.1ppt to 65.7% (exp: 65.6%).
- Hours worked posted a sharp 0.7% in the month (prior +0.2%) to 1.79bn hours, with annual growth accelerating to 3.0% from 2.2%.
The rise in the nation's unemployment rate to 5.05% from 4.94% (+0.11ppt) was driven by a 0.08ppt lift in participation to 65.66%. In absolute terms, participation increased strongly by 42,700 to outpace the net increase in employment of 25,700. As a result, the total of unemployed lifted by 17,000. If we look at the trend data, the chart above shows that workforce participation remains at an elevated level with the unemployment rate holding around 5.0%. In that sense, the fundamentals in the labour market remain solid.
March's 25,700 net increase in employment was the result of full-time work rising by 48,300 and part-time declining by 22,600. In a development that will encourage the RBA, overall employment growth lifted to 2.44% in annual terms from 2.28% and looks to have trended up slightly since the turn of the year. That is being led by full-time work at 3.41%Y/Y, with growth in part-time work falling to 0.37%Y/Y (click chart, below, to expand).
Also a positive was that hours worked increased by 0.7% in March — its strongest monthly gain since June 2018 — to 1.79bn hours, which lifted annual growth to 3.0%. Adjusting for the increase in employment, average hours worked per employee in March lifted by 0.5% to 139.6 hours to be 0.5% above the level from a year earlier.
Against these positives, measures of underutilisation deteriorated in March. The underemployment rate, which counts those employed but wanting to work more hours, lifted 0.1ppt to 8.2%. Meanwhile, the underutilisation rate, including the underemployed and unemployed, increased by 0.2ppt to 13.2%. Though neither are large moves they both remain elevated and are proving very difficult to bring lower on a sustained basis despite the robust conditions in the labour market.
The state detail for unemployment rates was; New South Wales steady at 4.3%, Victoria -0.1ppt to 4.6%, Queensland +0.7ppt to 6.1%, South Australia +0.2ppt to 5.9%, Western Australia +0.1ppt to 6.0% and Tasmania +0.2ppt to 6.7%. The chart, below, provides the breakdown of employment growth across the states in the month, quarter and year.
Australia's labour market performed well above expectations in March, as conditions remained solid over the first quarter with employment increasing by a net 71,000. That equated to employment growth in Q1 of 0.6%, which was a touch slower but close to growth in Q4 at 0.7%. The uptick in annual employment growth to 2.4% suggests that conditions in the labour market remain solid. That reduces the near-term likelihood of an RBA rate cut, though it could be argued that Tuesday's minutes already signaled that. For now, there is little to suggest that the tension between slowing GDP growth and strength in the labour market is showing signs of resolving.
