Unemployment rate rises to 6pc despite nearly 16,000 new jobs

Updated

Australia's unemployment rate has risen to 6 per cent, despite almost 16,000 jobs being added.

The Bureau of Statistics figures for June show a 0.1 percentage point increase from last month's upwardly revised jobless rate of 5.9 per cent, which was originally reported as being 5.8 per cent in last month's release.

Economist forecasts had centred on the jobless rate rising to 5.9 per cent, up from 5.8 per cent where it had been for several months.

Job creation slightly beat forecasts, with analysts expecting around 12,000 new jobs to have been added last month.

However, of the total 15,900 jobs added, 19,700 were part-time and were offset by a fall of 3,800 full-time positions.

On a more positive note, the proportion of people in work or looking for it rose 0.1 percentage points to 64.7 per cent, contributing to the rise in the unemployment rate, in spite of jobs growth.

Monthly hours worked also increased by almost 1 per cent to 1.63 billion, showing some underlying strength in the labour market.

As an indication of the jobs market's relative stability at the moment, the ABS trend figures that smooth out monthly volatility were steady at 5.9 per cent, and are only 0.2 percentage points higher than June last year.

Jobs data 'a mixed bag'

The Commonwealth Bank's chief economist Michael Blythe says there are positives and negatives in the latest employment figures.

"A mixed bag, we're still generating positive jobs numbers and that's good, equally we've hit the sticker shock number of a 6 per cent unemployment rate," he told Reuters.

"The bottom line is the economy is strong enough to be generating positive jobs growth, but it does underline the Reserve Bank of Australia's point of view that it's going to be a pretty slow grind before the unemployment rate is back on a downtrend again."

Deutsche Bank economist Adam Boyton says further increases in the unemployment rate are more likely than any sustained improvement in the short term.

"Our employment tracker – comprised of 11 different indicators of labour demand and sentiment – flags only very moderate growth in employment over the coming 3-6 months of around 7,500," he wrote in a note on the data.

"Such a pace of jobs growth would be likely, in our view, to see the unemployment rate drift higher."

BT Financial's chief economist Chris Caton says that likely rise in unemployment will put rate rises even further off the Reserve Bank's agenda.

"The rise in the unemployment rate will put to rest the idea that it peaked some months ago, and hence push back even further the first rate rise," he observed in a note.

The state data was also a mixed bag, with New South Wales, Western Australia and Tasmania all recording some improvement in participation and steady jobless rates, but Victoria and South Australia's labour markets deteriorating last month.

Queensland and the two territories posted very modest worsening of their employment prospects in June.

State-by-state NSW: Unemployment steady at 5.7 per cent; participation up from 62.9 to 63 per cent.

Vic: Unemployment up from 6.2 to 6.5 per cent; participation down from 64.4 to 64.1 per cent.

Qld: Unemployment up from 6.2 to 6.3 per cent; participation steady at 66.3 per cent.

SA: Unemployment up from 6.9 to 7.4 per cent; participation up from 62.1 to 62.9 per cent.

WA: Unemployment steady at 5 per cent; participation up from 68.3 to 68.4 per cent.

Tas: Unemployment steady at 7.4 per cent; participation up from 60.9 to 61 per cent.

NT: Unemployment up from 3.8 to 3.9 per cent; participation steady at 75.7 per cent.

ACT: Unemployment steady at 3.6 per cent; participation down from 71 to 70.8 per cent. Source: ABS. All data seasonally adjusted, except Tasmania, NT and ACT which are trend, due to small sample size. Source: ABS. All data seasonally adjusted, except Tasmania, NT and ACT which are trend, due to small sample size.

Topics: unemployment, economic-trends, business-economics-and-finance, australia

First posted