There were no signs of weakness in the May jobs data, with nearly 40,000 new jobs, a small fall in unemployment, a drop in the jobless rate, and continuing high levels of participation.
Australian Bureau of Statistics (ABS) data showed that more full-time jobs were created in May, while there was a small drop in part-time jobs, usually a sign of more confident employers wanting more full-time workers.
The ABS reported that full-time employment increased by 41,700 to 9.9 million people, while the number of part-time jobs fell by 2,100 to 4.456 million people.
The 39,700 new jobs exceeded the market estimate of 20,000 to 30,000. The dip in the jobless rate to 4% from 4.1% in April (when there was a spike in joblessness and weak growth in employment) means the rate remains below the 4.1% rate at the start of the year.
While hours worked eased by half a percent in May (when it should have risen with the nearly 40,000 extra new jobs), the ABS stated that this appears to be due to an increase in the number of people reporting sickness (COVID-19 and influenza numbers have been rising since April).
“The growth rate over recent months was broadly in line with employment. Some of the reduction in hours in May reflected more employed people than usual working reduced hours because they were sick,” the ABS said.
“Similar to May 2023, around 4.2% of people worked fewer hours because they were sick, compared with the pre-pandemic average for May of 3.5%,” according to Bjorn Jarvis, ABS head of labour statistics.
It was the second time this year that a fall in jobs in one month was followed by a rise, with the ABS attributing this to people waiting to start work in the month where the jobs data was weak, followed by people taking up their new positions the next month.
“In April we saw more unemployed people than usual waiting to start work. Some of the fall in unemployment and rise in employment in May reflects these people starting or returning to their jobs,” Mr. Jarvis said.
That factor was not mentioned in the analysis of the May data by the ABS.
As a result of the increase in employment and the fall in unemployment, the seasonally adjusted employment-to-population ratio remained at 64.1%, and the participation rate remained at 66.8%.
“The employment-to-population ratio and participation rate both continue to be much higher than their pre-pandemic levels. Together with elevated levels of job vacancies, this suggests the labour market remains relatively tight, though less so than in late 2022 and early 2023,” Mr. Jarvis said.
Even though the number of unemployed has risen, it remains 110,000 under the level in March 2022, just before the start of the pandemic, while more than 1.3 million new jobs have been created in the same period.