Australia’s employment growth likely weakened in June but underlying trend to remain firm

The underlying trend in Australia’s labor market is expected to remain firm, given the whole economic output growth is likely to remain strong. But the sample rotation indicates towards a weak labor market report in June as the outgoing group had an above-average employment-to-population ratio and a jobless rate that was a full percentage point lower than the average throughout the whole sample.

Therefore, employment is expected to have increased by just 6000, equivalent to an annualized rate of only 0.6 percent, noted Societe Generale in a research report. But the year-on-year rate is expected to remain at 1.9 percent and therefore quite above the growth rate of the working age population that is currently at 1.5 percent.

The joblessness is expected to have increased by around 4000, pushing up the jobless rate by 0.1 percentage points to 5.8 percent, given such weak employment growth in the month, according to Societe Generale.

“Our June forecasts will leave the quarter-on-quarter employment growth rate at 1.1 percent annualised, up slightly from the 0.8 percent rate in 1Q but far below the average rate of 2.7 percent in 2015”, added Societe Generale.