FILE PHOTO - Workers cast shadows as they stroll among the office towers Sydney's Barangaroo business district in Australia's largest city, May 8, 2017. REUTERS/Jason Reed/File Photo
August 17, 2017
SYDNEY (Reuters) – Australia’s jobless rate ticked lower in July led by a big bounce in part-time work while full-time employment fell, a mixed result that augurs poorly for wages growth and the course of inflation.
The unemployment rate slipped to 5.6 percent from an upwardly revised 5.7 percent in June as 27,900 new jobs were added, the Australian Bureau of Statistics said on Thursday.
But the gain was led solely by a jump of 48,200 in part-time work. Full-time jobs stumbled in July after a strong run recently. They still account for almost all of the gains in employment this year.
The Reserve Bank of Australia (RBA) had welcomed a sharp turnaround in the labor market this year after full-time jobs fell 23,100 in 2016. But policymakers continue to fret over high spare capacity and its impact on wages growth which is languishing at record lows of 1.90 percent.
That is also putting downward pressure on inflation which remains below the RBA’s 2 percent to 3 percent target band, forcing the RBA to slash interest rates twice last year to a record low 1.50 percent. It has stood pat on policy since then.
The underemployment rate, which measures people wanting to work more hours, was still near record highs.
Still, the RBA is confident of a revival with measures of business confidence and conditions at a decade high.
“The past volatility of the data means it pays not to get too excited by strong employment data and not to get too worried by weak data,” said Paul Dales, chief economist at Capital Economics.
“The full/part-time split and data on hours worked weren’t as encouraging as recently. But the recent improvement in the labor market is an upside risk to our cautious economic growth, inflation and interest rate forecasts.”
(Reporting by Swati Pandey; Editing by Eric Meijer)