Healthy jobs market puts spotlight on RBA

ALMOST 20,000 Australians found work last month far outpacing economists expectations of the nation’s jobs growth and heaping together a year of straight employment growth.

This helped drag the unemployment rate down to 5.5 per cent in September, compared to 5.6 per cent the month before.

CommSec chief economist Craig James said the jobs data was good news.

“More people are looking for work. More people are finding work. (It’s) the lowest jobless rate for over four years,” he said. Doing the heavy lifting were people getting part-time employment increasing 13,700 and people getting full-time employment increasing 6100.

This means there are now 12.3 million Aussies with a job.

Analysts had tipped the economy would produce 15,000 jobs. The participation rate which tracks the number of people looking for work remained steady at 65.2 per cent.

In trend terms, which irons out seasonal employment trends, it is the lowest unemployment rate in four years.

Mr James said the share of women participating in the job market is the highest on record.

And he said the figures, which now equated to “full employment” in states like NSW, meant the long wait for better wages could be almost over.

“The job market is healthy and is tightening in many parts of the country, suggesting higher wage growth is ahead,” he said.

HSBC chief economist Paul Bloxham said he expected to see the labour market “con- tinuing to tighten up” over coming quarters and this would put some “modest” upward pressure on wages growth. “We expect stronger growth and (a) tighter labour market to lift underlying inflation.” But JP Morgan analyst Ben K Jarman said Australia’s unemployment is range-bound and could remain so for the near future. “We expect it to hold between 5.5 per cent to 5.75 per cent for some time,” he said. Mr Bloxham said “all eyes” now turn to next Wednesday’s third quarter inflation reading to see if the price of goods and services is “well past its trough”. He expects the Reserve Bank to start lifting its cash rate in early 2018 as consumer prices rise.

Australia’s lending rate has been at a record low 1.5 per cent for thirteen months.

Mr James was more conservative saying the RBA will be on the sidelines for quite a while yet.

“We have virtuous economy with low inflation, low interest rates and a lower jobless rate. If this is confirmed on Wednesday, then rates will stay lower for longer,” he said.