The Australian employment report for May is due at 0130GMT
- Employment Change: expected +10K, prior +37.4K
- Unemployment Rate: expected 5.7%, prior 5.7%
- Full Time Employment Change: prior was -11.6K
- Part Time Employment Change: prior was +49K
- Participation Rate: expected is 64.8%, prior was 64.8%
Westpac preview (bolding mine):
- Total employment increased by 37.4k in April, well above expectations (mkt median and Westpac +5k). The two month jobs gain is now 97.4k.
- Of course this employment spike, at a 5.0% annualised pace, exaggerates the underlying momentum in the labour market. Over the past year, employment grew by 1.6%, in line with population growth. Full-time fell by 11.6k in April, but that comes after a jump of 73.9k in March. Full-time employment is 1.0% higher over the past year, and part-time is up 3.0%.
- In 2014 the ABS adjusted the supplementary surveys conducted with the April labour force and since then there has been greater than usual uncertainty around the April/May surveys. We have tentatively pencilled in a -5k for May but the annual pace of employment growth is underperforming our Jobs Index.
- In April the participation rate was steady at 64.8%, after rebounding over recent months, which resulted in a modest 18.3k gain in the labour force. This was somewhat surprising given the strength of the gain in total employment. As the gain in employment was greater than the gain in the labour force the unemployment rate printed at 5.71% in April, a moderation from 5.86% in March.
- Given that we see survey volatility as part of the reason for the May negative print for employment we are forecasting the participation rate to ease back to 64.7 from 64.8 which should see a modest 5k decline in the labour force. This decline in the labour force should be enough to hold the unemployment rate flat at 5.7%.
