Australia: Labour market data show hours worked are picking up fast - HSBC

Paul Bloxham, Chief Economist at HSBC, notes that the Australia’s labour market headline figures were largely in line with the market expectation as the employment rose by 14k jobs in June (market had 15k) and the unemployment rate was 5.6% (in line with the market).

Key Quotes

“The surprise was the full-time/part-time split, which was much more positive than expected, with the survey showing strong full-time job creation. As a result, the hours worked numbers rose by a strong 3.3% y-o-y (up from -0.5% y-o-y just four months ago). It is now clear that the official labour force survey is now telling us that spare capacity is quickly being absorbed, much as the other measure of the labour market, such as job advertisements and the business surveys, have been telling us for some time.”

“We see this, along with the lift in corporate profits and the minimum wage, as likely to support a pick-up in wages growth in H2 2017. We expect the RBA to lift its cash rate in Q1 2018.”