Reporter's view: Monthly labour data volatility obscuring the picture
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Reporter’s view: Economics correspondent Jennifer Duke writes: "While the main game for the RBA is still inflation, the other focus for the central bank is ensuring the big employment gains made during the pandemic aren’t destroyed by keeping rates too high for too long.
"Right now, the labour market is showing some serious resiliency and this could disappoint those who are hoping for earlier rate cuts. If the print today had been a lot weaker, the case for easing monetary policy sooner would have risen. But it is just one piece of the puzzle.
"The labour force figures have jumped around over the last few months and the RBA will get another read in April before it meets again in May and releases new forecasts. There will also be inflation data sets and a range of other indicators. The unemployment rate is still expected to soften as the year goes on but expect the monthly data to continue to be tricky.
"The central bank and economists alike want to look through the noise and at the underlying momentum and are alive to the vagaries of monthly data. Treasurer Jim Chalmers described the resilient labour market as one of Australia’s 'greatest strengths' prior to the publication of the figures. It’s hard to disagree with that assessment right now on the basis of today's numbers."
Unemployment rate falls to 3.7%
The news: The jobless rate fell in February to 3.7% on a seasonally adjusted basis, down from 4.1% in January. This beat market forecasts which were tipping 4%.
The numbers: Employment grew by 116,000 people last month. This included an extra 78,200 full-time workers and 38,300 part-time employees to a total 14,269,600 people.
The participation rate was up, at 66.7%, the employment-to-population rate was up to 64.2% and underemployment fell to 6.6%. Monthly hours also jumped to 1.93 million. However, in trend terms there was a slight decrease in the participation rate and monthly hours worked.
The context: Unemployment is a critical indicator for the health of the economy and businesses but the last couple of months have produced some volatile data. December, in particular, was a weaker than usual month with 62,000 fewer people in employment.
What they said: “Both the employment-to-population ratio and the participation rate in February were around where they were in August 2023, given employment growth and population growth have both been around 1.4% over the past six months, and there has been relatively little change in unemployment,” ABS head of labour statistics Bjorn Jarvis said.
The source: ABS release
