Australian employment rises strongly in August, jobless rate stable at 5.3 pct

Australian jobs report comes in strong in August, implying that the labor market continues to be in a good shape. Employment in the nation rose robustly by 44k in the month, reversing the decline of 4.3k seen in July. In the past three months, employment has increased at an average of 33k per month. The strength was because of a sharp increase in full-time jobs, while part-time jobs rose 10.2k. The jobless rate stayed stable at 5.3 percent in August, while the participation rate rose to 65.7 percent.

Significantly, the underemployment rate fell to 8.1 percent from May’s 8.5 percent. This leaves the overall labor market underutilization at 13.4 percent. While it is still high in historical terms, it is well below its peak of 14.8 percent seen in November 2014. Given the earlier research showing the effect on wage growth, the ongoing rebound in underemployment is an encouraging sign, noted ANZ in a research report.

The ABS, from next month, intends to release seasonally adjusted estimates of the underemployment and underutilization rates on a monthly basis, which might give a timelier guide on these indicators.

Throughout the nation, NSW was the strongest state with a rise of 43k jobs, while there were also gains in Queensland and Western Australian. Employment dropped modesty in Victoria, although the jobless rate dropped to 4.8 percent.

Leading indicators for the labor market have been more mixed in recent months. On balance, they continue to indicate towards further improvement.

“The ANZ labour market indicator, which incorporates ANZ jobs ads, and business and consumer survey measures, suggest that employment should continue to grow at an annual rate of around 2.5 percent, while the risks to the unemployment rate in the near term remain to the downside”, added ANZ.

At 12:00 GMT the FxWirePro's Hourly Strength Index of Australian Dollar was highly bullish at 121.963, while the FxWirePro's Hourly Strength Index of US Dollar was slightly bearish at -68.4101. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex