Labour Force Survey — February | By the numbers
- Employment (on net) increased by a stronger-than-expected 26.7k (seasonally adjusted) in February—surpassing the median estimate (of 6.3k) for the 4th straight month. January's initially reported increase of 13.5k was revised to 12.9k.
- The national unemployment rate reversed its 0.2ppt rise in January, falling unexpectedly from 5.3% to 5.1%, whereas the consensus forecast was for it to remain unchanged.
- Spare capacity as measured by the underutilisation rate declined from 13.9% to 13.7%, though the underemployment rate was unchanged at 8.6%.
- Workforce participation rate eased from 66.1% to 66.0% in the month (expected: 66.1%).
- Aggregate hours worked fell by 0.2% in February after declining by 0.5% in January, which saw annual growth slow from 0.9% to 0.5%.
Labour Force Survey — February | The details
The reversal in the unemployment rate in February from 5.29% to 5.10% was driven by a robust monthly employment outcome (+26.7k) at the same time as participation in the workforce eased from 66.10% to 65.99%. Overall, the workforce was little changed, rising by just 0.3k in the month.
The decline in the headline unemployment rate flowed through to a reduction of 0.16ppt in the underutilisation rate (combining the unemployed and underemployed) from 13.88% to 13.72%; however, undermployment (counting workers who are available for and want additional hours) was essentially unchanged at 8.63% from 8.59% in the month prior.
On the employment outcome of 26.7k, this was driven mostly by a 20.0k rise in part-time employment as the full-time segment advanced by 6.7k. The pace of employment growth through the year firmed from 1.86% to 2.06%, with part-time rising from 2.49% to 2.79% and full-time up from 1.57% to 1.65%.
Despite the rise in employment in February, for the second straight month aggregate hours worked declined, easing by 0.2% to 1.775bn hours for an annual growth rate of 0.5%. Adjusting for the increase in employment, average hours worked per employee in the month declined by 0.4% to 136.4 hours (-1.4%yr).
Across the states, employment in February advanced in New South Wales (1.5k), Queensland (14.3k), South Australia (2.8k), Western Australia (10.9k) and Tasmania (4.0k), though Victoria went against the run of play (-8.8k). However, in terms of unemployment rates, both New South Wales (from 4.5% to 4.6%) and South Australia (from 5.7% to 5.8%) saw increases. Declines were recorded in Victoria (5.4% to 5.3%), Queensland (6.2% to 5.6%), Western Australia (5.7% to 5.2%) and Tasmania (5.7% to 5.0%).
Labour Force Survey — February | Insights
The details around employment and unemployment were stronger than expected and broadly mitigated a soft report in January. However, as noted by the ABS, concerns around the coronavirus outbreak had yet to take hold in February so it would be dangerous to read too much into today's report. The ABS advised that the early impacts of the coronavirus on the labour market data are likely to become evident in the first instance through the hours worked measure.
