Matusik Missive Extra - Whilst at the shops
A funny thing happened whilst I was just at the shops - the Australian economy created even more jobs. Even Queensland is now getting in the act – and not before time.
Despite sluggish retail sales, falling home loans, weak building approvals and falling consumer and business confidence, employers gave jobs to another 26,900 people in May. Over 11.05 million people are now employed, according to the ABS; a rise of 2.6% from May 2009.
Nationally, the unemployment rate fell 0.2% to 5.2%, where it was a couple of months ago after revisions (and its lowest since early 2009), and the number of people unemployed fell by 25,400 to 600,900, down 8.6% on a year ago. Even underemployment fell by 51,200 to 817,000 last month.
The west continued to lead the way – unemployment fell 0.5% in Western Australia seasonally-adjusted, to 4.1% – a strange outcome given all those mining projects supposedly put on hold because of the RSPT. New South Wales also had a big seasonally-adjusted fall, down to 5.2%. Unemployment in Queensland and Victoria was steady 5.4% and 5.5% respectively.
Employers added 36,400 full-time jobs last month, taking the number of full-time jobs created in the last three months to more than 110,000. Part-time jobs fell for a third straight month, with about 9,400 going in May, a classic sign of an economy gathering strength. It is a confusing world indeed!
And somewhat miraculously, Queensland created 24,900 full-time jobs last month and 47,100 similar jobs for the year to May 2010, both on a seasonally-adjusted basis.
Now to give credit, where is credit due, and given that we have been critical of Queensland’s performance of late – only last month, Queensland, according to the same ABS labour force figures, lost over 1,000 full-time jobs over the twelve months to April – any flaunting of these new labour force statistics by the Bligh Government is justified. These are full-time jobs, after all.
Hopefully, this trend will continue and is not just a statistical aberration. Strong growth in full- time work is the key to a healthier residential market.
Fingers crossed.
PS. Now, before someone emails us back and calls us hypocrites, let me quote a line from an old John Mellencamp song - “Hypocrite used to be a big word to me, it doesn’t mean anything to me now”. We call it as we see it.
PPS. Better than expected job growth, however, means higher interest rates. In our view, the RBA is still likely to lift the cash rate to 5% by the end of calendar 2010. The cash rate could be as high as 6%, with variable mortgage rates over 8.5%, by late 2011.