Australia's unemployment rate decreased 0.1 percentage points to 6.2 per cent in August, on a seasonally adjusted basis.
Meanwhile, the seasonally adjusted underemployment rate was unchanged at 8.4 per cent. Combined with the unemployment rate, the latest seasonally adjusted estimate of total labour force underutilisation was unchanged at 14.3 per cent in August.
AMP Capital chief economist Shane Oliver noted that annual jobs growth is “a surprisingly robust” two per cent year-on-year. However, he believes that unemployment is likely to rise over the coming months.
“With the economy running at just two per cent growth over the year to the June quarter, if allowance is made for productivity growth it’s hard to see jobs growth being sustained at the two per cent annual pace seen over the last year, so jobs growth is likely to slow in the months ahead, which is likely to see the modest rising trend in unemployment resume,” he said.
“While the unemployment rate at 6.2 per cent is not as high as has been expected, labour force underutilisation which allows for unemployment and underemployment is high at 14.3 per cent.”
Mr Oliver noted that while jobs growth in WA is “still ok” at 1.7 per cent year-on-year, it is far stronger in NSW at 3.3 per cent year-on-year, which across a range of indicators remains the number one ranked state in terms of economic performance.
“The big disappointment is perhaps South Australia where unemployment fell but to a high 7.9 per cent,” he said.
Yesterday’s jobs report for the month of August is not different enough from expectations to have much impact on the RBA’s thinking regarding the economy and interest rates in the short term, Mr Oliver concluded.