Australia: Unemployment rate eased from 5.6% to 5.5% in Jan - TDS

Australian unemployment rate eased from 5.6% to 5.5% in Jan due to employment rising +16k and the participation rate eased to 65.6%, notes the research team at TDS.

Key Quotes

“The full-time fell -50k (+302k in 2017) while part-time rose +66k (+101k in 2017).”

“Last year's cut in Sunday and public holiday penalty rates may be behind the jump in part-time jobs (only five occurrences >60k in the last decade). January brings many part-time summer jobs, and lower penalty rates could have boosted retail and hospitality employment (18% of jobs in 2017) more than usual.”

“The 1 July cut in penalty rates partly explains why the 3.3%/y jump in minimum wages failed to translate into the Q3 WCI report. On 21 Feb, we expect Q4 wages growth of +0.64%/qtr, lifting the annual rate to 2.2%/yr.”

“For the RBA: this is noise. Annual employment growth remains strong at 3.3% while the unemployment rate remains at 5½%. OIS is behind the curve, not priced for a rate hike until April 2019. The AUD at $US0.793 briefly dipped via the weak full-part-time mix but a softer USD is the main FX focus today.”