Australian jobless rate falls in May, labor market likely to see further improvements in months ahead

Australian jobless rate dropped more than anticipated in May. However, other details in the report came in slightly disappointed. Total employment rose slightly below expected. Employment rose 12 k in May, following a downwardly revised 18.3k rise seen in April. The jobless rate dropped to 5.4 percent from 5.6 percent. This is the lowest since November 2017. Along with this, the participation rate also dropped in the month from 65.6 percent to 65.5 percent.

The report also had the quarterly update of the jobless rate. However, it rose 0.1 percentage point in the three months to May to 8.5 percent. On the positive side, it is below where it was a year-ago. Looking through the volatility, it implies that while underutilization in the labor markets is falling, this is a very gradual process.

In line with the rebound in the underemployment rate was a decline in full-time jobs by 20.6k in May, while part-time jobs rose 32.6k. Along with the softness in full-time jobs, total hours worked fell 2.4 percent.

New information on leading indicators for the labor market has come in mixed lately. ANZ Job Ads rebounded in May after previous weakness. Business conditions, while still high by historical standards dropped in May.

“Overall, though, the ANZ labour market indicator continues to suggest further improvements in the next few months”, stated ANZ.

At 13:00 GMT the FxWirePro's Hourly Strength Index of Australian Dollar was slightly bearish at -59.3829, while the FxWirePro's Hourly Strength Index of US Dollar was highly bullish at 132.494. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex

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