Today’s jobs report for the month of February was a disaster. National employment unexpectedly fell over the month (economists had expected a decent gain), unemployment spiked to the highest rate in more than a year, hours worked across the entire workforce dipped at the fastest rate in almost a year, and the pool of under-employed workers rose again. The only moderately good news was that there was a large rise in full-time jobs in February (in net terms), but this came after a plunge in January.
There was, however, a 33,500 plunge in part-time employment last month (albeit after a big gain in January), which swamped the welcome gain in full-time positions. Annual growth in employment stayed below 1% and is well below the long-term average growth rate.
The jobless rate unexpectedly spiked to 5.9% last month, against economists’ expectations of an unchanged rate at the 5.7% reported for January. Queensland now has the highest jobless rate of any state at 6.7%, closely followed by South Australia (6.6%). There was a surprise fall in the rate for Western Australia, which previously shared the highest jobless rate with South Australia. The nation’s lowest jobless rate is the 5.2% in NSW.
The unfortunate volatility reported in recent employment reports means it always pays not to read too much into one month’s results. The underlying message, though, is pretty clear enough - employment conditions are OK, but not great. Too many of the jobs being created are part-time, meaning the pool of underemployed workers continues to grow (the underutilization rate rose today to 14.6%), and the jobless rate is struggling to stay below 6%. Meanwhile, wages growth continues to plod along at the lowest rate for a generation.
The good news is that things could be worse – the bad news is that it probably will be some time before there is sustained improvement. As with the patchy business investment outlook, it seems many firms still are reluctant to hire sufficient permanent employees to absorb new entrants to the labour market.