Australia's Labour Force Survey for December is due at 11:30am (AEDT) today. Renewed strength in employment over recent months has seen the unemployment rate fall to and maintain new cycle lows at 3.4% alongside a return in the participation rate to record highs. This momentum is expected to have continued into the turn of the year.
As it stands | Labour Force Survey
Employment increased by 64k in November, well above the topside of the range estimates and its strongest rise in 5 months. Both full-time (34.2k) and part-time employment (29.8k) contributed to the headline increase. Following the 2021 Census, the ABS updated its population estimates used for the Labour Force Survey. That process led to a significant upward revision to employment of 87.5k between July 2021 and October 2022. This boosted the rise in employment over the past year to 553.7k (4.2%), and to 781.6k (6%) above pre-pandemic levels.
The unemployment rate held at its half-century low of 3.4%. Broader measures of labour force spare capacity tightened further; the underemployment rate came in from 6% to 5.8% and the total underutilisation rate declined from 9.4% to 9.3%, its lowest since 1982.
Hours worked softened slightly in November (-0.4%) coming on the back of a sharp acceleration in October (2.4%). Seasonal and Covid-related factors have led to a volatile profile for monthly hours in 2022, but the level has risen sharply over the year (5.4%) and on a pre-pandemic comparison (7.6%), with these increases also revised higher from previous reports.
The participation rate moved back up to a record high at 66.8% (from 66.6%), matching the level from June. Growth in the working-age population has accelerated (2%yr) boosted by the effect of the reopening of the international border on net overseas migration.
Market expectations | Labour Force Survey
Employment on the median estimate is forecast to moderate to a 22.5k increase for the month. That is anticipated to hold the unemployment rate at 3.4%, based on an unchanged participation rate at 66.8%.
What to watch | Labour Force Survey
Employment has surprised well to the upside of expectations in the past two reports, while the upward revisions made to prior months confirm the underlying momentum was stronger than earlier reported. The consensus figure for today's report is a relatively modest 22.5k and given the current trends, there looks to be scope for another upside result today. Measures of job advertisements and vacancies have come off their peaks but remain very elevated consistent with robust labour demand.
