The ABS is scheduled to publish Australia's Labour Force Survey for September at 11:30am (AEDT) today. Employment is expected to advance by 25k in the month and hold the unemployment rate at 3.5%, in line with the lows last seen in the 1970s. Hours worked are rising broadly in line with the increase in employment, though with significant disruptions from Covid-related absences.
As it stands | Labour Force Survey
Employment increased by 33.5k in August (vs 35k expected), broadly reversing a 40.9k decline in July. The result was driven by full-time employment (58.8k) as employment in the part-time segment fell (-25.3k). At just under 13.6 million, total employment stands at 4.5% above its pre-Covid level.
The strong post-Covid recovery in employment has driven Australia's unemployment rate down to 50-year lows and the participation rate to record highs. In the month of August, there was a slight uptick in the unemployment rate from 3.4% to 3.5% as an increase in labour force participation exceeded the rise in employment. The participation rate now stands at 66.6%, up 0.2ppt over the month. Underemployment is down at 5.9%, its lowest since 2008, while total underutilisation is at a 40-year low of 9.4%.
Hours worked across the Covid period are up 4.8% since March 2020, close to the expansion in employment (4.5%). A combination of Covid-related absences and school holiday periods weighed on hours worked over June-July but August saw a rebound of 0.8%m/m.
Market expectations | Labour Force Survey
The median estimate for employment is for a rise of 25k between a range of forecasts from 13.5k to 45k. The ABS's payrolls series suggests employment conditions have remained solid with the index fairly flat over the month to mid-September. The unemployment rate is expected to hold at 3.5% (range: 3.4% to 3.6%).
What to watch | Labour Force Survey
Headline employment is the figure to watch in today's report. The 3-month average is currently running at 22.5k, though that includes July's fall which was associated with seasonal volatility. With the post-Covid recovery broadening out, the pace of hiring has moderated over the course of the year; employment averaged 61.2k per month in Q1 and then eased to 37.7k in Q2. The levels of job advertisements and vacancies have come off their highs but remain very elevated. Overall, employment looks to be settling to a more sustainable pace but still above the flow of entrants into the labour force and therefore consistent with maintaining downward pressure on the unemployment rate.
