Australia Employment Beats Forecasts, But April Revision Tempers Strength

Australia’s labor market rebounded in May, with employment rising by 40.3k, above expectations of a 30.5k increase, while the unemployment rate edged down from 4.5% to 4.4% as expected. The participation rate also ticked higher from 66.6% to 66.7%, pointing to resilience in labor supply. However, the headline gain was partly offset by a sharp downward revision to April’s figures, with the previously reported -18.6k decline revised to a much steeper -40.7k contraction.

The composition of employment growth was also mixed. Full-time employment increased by just 5k, while part-time positions accounted for the bulk of the recovery with a 35k gain. Meanwhile, monthly hours worked fell -1.1% mom after rising 0.9% mom in April, suggesting overall labor demand was softer than the headline employment figures alone might indicate.

ABS head of labor statistics Sean Crick said the rebound reflected an easing in the backlog of unemployed people waiting to start new jobs. “Over the past few months, we have recorded higher proportions of unemployed people waiting to start jobs who then remained unemployed in the following month,” he said. “The backlog of people waiting to start a job has eased in May, contributing to the 40,000 rise in employment and 18,000 fall in unemployed persons.”

Crick also noted that April’s unusually strong hours worked reflected fewer people taking Easter leave, with May’s decline bringing hours worked “back in line with employment growth since the end of the pandemic in June 2022.”

Overall, the report suggests the labor market remains relatively resilient, but softer hours worked and the large revision to April may temper expectations of a significantly stronger labor market.

Data Summary Table

Employment Breakdown

Full Australia employment release here.