The ABS is due to publish Australia's Labour Force Survey for March at 11:30am (AEST) today. Conditions in the labour market returned to strength in February after slowing during the summer holiday period. Employment rebounded sharply to drive the unemployment rate back down to half-century lows. In today's report, employment is expected to moderate leading to a slight rise in the unemployment rate.
As it stands | Labour Force Survey
Labour market activity saw employment and hours worked rebounding strongly in February. As the peak summer holiday period wound down, around 4.9 million Australians returned to work from annual leave in the month. With many people starting new jobs, employment increased sharply by 64.6k - its strongest net gain in 8 months - more than reversing the declines in December (-16.6k) and January (-10.9k).
Reflecting the rebound in labour market activity, hours worked surged by 3.9% to post its fastest month-on-month rise in a year. Hours worked in February were at a similar level to October-22, up more than 8% on their pre-pandemic baseline.
On the back of the strength in employment, the national unemployment rate fell back to 3.5% from 3.7%, retracing its rise in January to be around its lowest since 1974. Both the underemployment rate (5.8% from 6.1%) and the underutilisation rate (9.4% from 9.8%) also declined after rising over December and January. Alongside a labour market that was tightening again, the participation rate rebounded to 66.6%, just below the record high from November-22.
Market expectations | Labour Force Survey
Employment is forecast to rise by 20k in March on the median estimate, with the range for the outcome between 10k and 45k. The lead from the ABS's payrolls series indicates employment continued to rise at a solid pace following February's rebound. In spite of that, the unemployment rate is anticipated to lift from 3.5% to 3.6% (range: 3.4% to 3.7%).
What to watch | Labour Force Survey
The pace of employment is the key focus as growth in the working-age population has accelerated post the pandemic and reopened borders to be running at its fastest clip since 2009. The RBA and most forecasters expect unemployment will rise later this year as a slowing economy becomes a headwind for employment. On the plus side, job vacancies remain elevated and while they have eased from their highs, labour demand still remains very robust.
