Australian labour market remains strong - ANZ

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Jan 14, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
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    FXStreet (Delhi) – Justin Fabo, Senior Economist at ANZ, notes that Australia’s both employment and the unemployment rate beat expectations and while sample rotation has boosted jobs growth in recent months, and may again in January, labour market trends remain positive.

    Key Quotes

    “Job ads point to employment growth remaining relatively solid over the next 3-6 months. The RBA is on hold for some time.

    We continue to view Australia’s labour market in a positive light. While jobs growth has been boosted by the vagaries of the rotation of the labour force survey sample, a range of non-ABS indicators suggest jobs growth ended 2015 on a strong note, just not as strong as the ABS suggest. ANZ job ads point to underlying hiring remaining quite positive in coming months.

    The unemployment rate (at 5.76%) has fallen 0.6ppts from its peak and employment rose 300k persons in 2015. These are strong numbers. Encouragingly, youth unemployment has fallen sharply, likely boosted by the strength in retail and hospitality jobs. In addition, the improving economy and labour market have been broadening across the states.

    The ABS flagged today that sample rotation could continue to boost measured employment growth in January as the group falling out of the survey’s scope has a relatively low employment-to-population ratio.

    RBA implications: clearly the RBA is on hold for some time given the strength in labour market conditions and that the starting point for the unemployment rate is better than they and most economists had expected. The focus for monetary policy should be on the 12-18 month outlook and that’s where we continue to see some challenges from the shaky global backdrop and a loss of growth momentum in housing and from the lower AUD. That said, mining investment will become less of a drag and the economy’s starting point is better than expected.”
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