Full-time jobs likely to have driven Australia’s employment growth in August

Australia’s employment growth in August is expected to have shifted towards full-time jobs. July’s growth in employment, even if it was impressive on the surface, was entirely due to part-time jobs that rose 72k, whereas full-time jobs had dropped by 45k.

“Assuming, for example, that each part-time job is for half the full-time job hours, this would mean that in full-time equivalent terms, employment in fact declined by 10k. Hence, there is in our view scope for a reasonably strong increase of around 12k in August”, said Societe Generale in a research note.

Full-time jobs are expected to have entirely driven such a gain, with part-time jobs falling, so that full-time equivalent employment growth surpasses the headline figure. However, the scope for quite a larger increase is possibly restricted by statistical factors. The outgoing rotation group has a 1.3pp higher employment-to-population ratio than the same as a whole, and a 1.2 percentage point lower jobless rate than the sample as a whole, stated Societe Generale.

Even if the Australian economic growth was sluggish as compared to any of the earlier three quarter in the June quarter, final domestic demand growth was more robust as compared to the first quarter. This implies that underlying labor demand growth is likely to have held up well. Even if unemployment is expected to have increased by 4000, the jobless rate is likely to have remained at 5.7 percent, according to Societe Generale.