Strong employment growth was unable to prevent Australia's unemployment rate lifting to 4.6% in August, its highest since late 2021. The report, mixed in many ways, had little effect on pricing for an RBA rate hike next week, remaining around 90%. There also appears to be some teething issues at play amid the overhaul of the series, with the ABS highlighting caution around the seasonality applied to the August figures.
Employment rose by a net 39.5k in August, nearly double the expected increase (20k) and more than rebounding from the surprise fall in July (-15.9k). The August gain was driven entirely by a 45.8k contribution from the part time segment, with full time employment down 6.3k. Across the 3 months to August, employment gains averaged a solid 34k per month, its strongest momentum in 6 months.
An uptick in labour force participation played a key role in seeing the unemployment rate rise. The participation rate increased from 66.9% to 67.1%, adding 67.7k people to the labour force. That exceeded the rise in employment (39.5k), driving the unemployment rate up from 4.5% to 4.6% - its highest since November 2021. However, with the broader underemployment rate easing from 6.3% to 6.2%, total labour force underutilisation remained unchanged at 10.8%.
Hours worked have been volatile through recent months and that extended to August, lifting by 0.7% month-on-month. That reversed July's decline, while base effects saw annual growth accelerate to 1.7%. The growth in hours worked also significantly outpointed employment growth (0.3%). Full time hours rose 0.6% month-on-month (1.7%yr) - despite the contraction in employment - while part time hours rose 1.3% month-on-month (1.4%yr).
