Australia unemployment rate falls to 5% in October

Australia’s trend unemployment rate fell from 5.2 % to 5.1% in October, marking the lowest unemployment rate since 2012, according to the latest figures released by the Australian Bureau of Statistics (ABS)

Unemployment in October best Australia has seen since 2012
Source: Bloomberg

Trend employment increased by 25,400 persons in October, with full-time employment increasing by 22,900 persons, and part-time employment by 2,500.

Chief Economist for the ABS, said this month is the 25th consecutive monthly increase in employed full-time jobs, increasing on average of 20 thousand more jobs each month.

The trend underemployment rate remained steady at 8.3% this month, and the trend underutilisation rate decreased 0.1 percentage points to 13.4 %, according to ABS figures.

IG Market Analyst, Kyle Rodda says while the numbers are solid, it’s unlikely to change the central bank’s outlook.

“From a fundamental basis, though the numbers were very solid, will they change the RBA’s thinking enough to bring forward rate hikes? I doubt it.

The RBA has flagged their employment forecasts already, which will translate into an unemployment rate of 4.75% at some point next year -- that has been priced in.” Mr Rodda said.

Trend monthly hours worked increased by 0.2 % in October and by 2.0 % over the past year, with New South Wales and Victoria recording the strongest annual growth in trend unemployment at 3.5% and 2.6%.

The seasonally adjusted number of persons employed increased by around 32,800 and the seasonally adjusted unemployment rate remained steady at 5.0% with the labour force participation rate increased 0.1 percentage point to 65.6%, according to ABS figures.

Australian dollar price

The Australian dollar saw a break of resistance at 0.7240/0.7250 upon the data release on Thursday.

IG Market Analyst, Kyle Rodda says the Australian dollar will also see positive developments out of China

“In the very short term, potential upside from here: 0.7310 is a viable level to look to fade Aussie Dollar rallies – a very bullish case could be made for a pop to 0.7450 if the massive amount short positions unwind in quick succession.” Mr Rodda said.

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