Australian employment growth likely accelerated in May, jobless rate to have dropped to 5.1 pct

Australian employment data for the month of May is set to release next week. According to an ANZ research report, employment is likely to have risen by 35,000 positions in the month, pushing the jobless rate to 5.1 percent. The boost to employment is likely to have been provided by election, if historical trends held. The jobless rate has also tended to fall during election months.

Nevertheless, the backdrop of worsening leading indicators of employment, and the holiday period in May, might have tempered the gains in employment. The Reserve Bank of Australia will “continue to monitor developments in the labor market closely,” but with the May figures likely to have been distorted, it might look through the data.

On a sequential basis, employment is likely to have grown 0.3 percent, whereas the growth is expected to have accelerated to 2.7 percent on a year-on-year basis. This might be the most rapid annual rate in nearly a year. The jobless rate is likely to have eased to 5.1 percent from April’s 5.2 percent.

“And if there has been a decline in the participation rate from April’s record high, May’s unemployment rate could have fallen to 5.0 percent. However, the backdrop of deteriorating leading indicators and the distortion in the May data caused by the election suggest that this may be a temporary reprieve”, added ANZ.

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