Australia's Labour Force Survey for April is due at 11:30am (AEST) today. Seasonality has led to a run of volatile employment outcomes in recent months, and this could continue today with the April survey coinciding with the Easter holiday period. Amid this uncertainty, the consensus forecast is for employment to rebound by around 22k in the month but for the unemployment rate to lift to 3.9%.
A recap: Volatility continued but employment lifted solidly in Q1
Employment surprised to the downside in March falling by 6.6k against expectations for a modest 7.2k increase. This was another in a series of volatile employment outcomes over recent months coming off the back of a 117.6k surge in February. Amid the volatility, employment increased solidly over Q1 (122.3k), an average increase of 40.8k per month.
The decline in employment in March saw the unemployment rate rise from 3.7% to 3.8%, with a larger increase kept at bay due to an easing in the participation rate (66.6% from 66.7%). Although the unemployment rate increased, the broader underemployment rate declined from 6.6% to 6.5%, leaving the total labour force underutilisation rate unchanged at 10.3% - remaining at its lowest since October last year.
Hours worked advanced by 0.9% in March but were flat over Q1. Over the past year, labour market conditions have remained resilient to the economic slowdown in Australia, but an adjustment has played out through slower growth in hours worked. The annual pace in hours worked has stepped down to a 1.7% pace from 6.5% a year ago.
Seasonal volatility again a factor in April
The consensus estimate is for employment to rise by around 22k in April, with the band of estimates ranging from -10k to 45k. As that range suggests, there is little conviction over what the outcome will be. This is partly due to seasonal effects. The reference period for the April survey commenced on Easter Sunday and took in school holidays in a few states. Payrolls data published by the ABS last week showed a 0.6% decline in the employment index for the month to mid-April, highlighting the seasonal impact of the holiday period. How that translates to a seasonally adjusted figure for employment is the big question, one which cannot be answered with any certainty. A slight uptick in the unemployment rate to 3.9% is anticipated (range: 3.8% to 4%), based on the participation holding flat (66.6%).
