Australia added three times the number of jobs as was forecasted in July. While the unemployment rate remained at 5.2%, the economy added 41,400 new jobs in the previous month. Economists had forecasted the possible addition of 14,000 new jobs while in reality, Australia added nearly thrice the same. The workforce participation rate increased slightly to a new high of 66.1%.
The growth in employment options has also increased the need for hiring. Sarah Hunter is the head of macroeconomics of BIS Oxford Economics in Sydney. She says that the spare capacity of the Australian market is much larger than what was previously imagined.
The Liberal Party of Australia was re-elected to power in May this year and the labour market clearly reflects the outcome.
Philip Lowe, RBA Chief, says that the increase in workforce participation and hiring speak of a healthy labour market. However, the increase in the number of job seekers makes lowering the unemployment rate a tough task.
Callam Pickering works as an Economist with the Jobsite Indeed. He says that the employment growth in Australia in the last two years should have got the unemployment rate down. However, increasing population growth and rising workforce participation has put more pressure on employment growth.
The rate of underemployment and underutilization are at 8.4% and 13.6% respectively. These rates indicate that an increase in the wage growth rate may be unlikely anytime soon, as per Live Mint.
Queensland, Victoria and New South Wales saw the most number of new jobs created in Australia. These states are on the east coast of Australia and they benefited from the RBA’s low cash rate. This created a surge in apartment construction in the states thereby creating thousands of new jobs.
The Australian economy slowed down sharply in mid-2018. Despite this, the labour market has been seeing steady growth. This can be attributed to the fact that most of the hirings were govt-related which are not affected by economic conditions.
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