Job stats show more growth
Australia's run of jobs growth has continued.
New stats show employment increased by 44,000 over the month of August, with 33,700 full-time jobs created, while part-time work increased by 10,200.
The unemployment rate remains at 5.3 per cent, with the number of people looking for work increasing.
But there is still slackness in the labour market keeping wages growth low tight.
The underemployment rate — a measurement of workers who are looking for more hours — decreased to 8.1 per cent. Underutilisation — the sum of unemployment and underemployment — is at a five-year low.
Economist Callam Pickering says underutilisation correlates most strongly with wage growth.
“A lower underutilisation rate should directly translate into higher wage growth over the remainder of the year,” Mr Pickering said.
But 13.4 per cent underutilisation is quite high, he said, especially when compared to the 10 per cent figure from before the global financial crisis.
“The improvement is welcome, but labour market slack remains high across the country,” he said.
RBC analyst Su-Lin Ong said the slack can be removed from the jobs market, but it will be slow.
“While the move lower in the underemployment rate is encouraging after a worrying lift [in the second quarter], it is still less than a percentage point below its historic high,” Ms Ong said.
“Ample slack remains in the labour market. Accordingly, we need persistent above-trend growth and employment generation to continue to erode this slack.
“The odds are this will happen, but only slowly, keeping the RBA firmly camped on the sidelines.”