March Labour Force Survey: Total employment: 25.7k from 10.7k (revised from 4.6k). Unemployment rate: 5.0% from 4.9% (unrevised 4.9%). Participation rate: 65.7% from 65.6% (unrevised 65.6%).

Total employment rose 25.7k in March, stronger than the market median estimate of 15k. The three month average is now 23.7k, from 21.8k in February, indicative of a robust trend in the labour market so far in 2019. In the year to March employment has lifted 305k or 2.4%. Our Jobs Index is pointing a pace of growth around 2.3%yr while jobs ads suggest that while growth should be a little softer than this it still should be stronger than 2%yr.

A further indication of the robust nature of labour demand is that full-time employment rose 48.3k in March, to be up 289.8k/3.4% in the year, while hours work lifted 0.7% in the month to be up 3.0%yr.

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In March the unemployment rate did drift higher, from 4.9% to 5.0% (4.94% to 5.05% so a whisker away from rounding to 5.1%) as the lift in participation (65.66% from 65.58%) resulted in a 42.7k gain in the labour force. The labour force grew at a 2.0% pace in the year to March.

By state unemployment was flat in NSW at a national low of 4.3% (employment fell 2.6k following a –6.7k in February) while it fell to 4.6% in Victoria from 4.7% even though there was a robust 10.0k gain in employment following a solid 6.4k gain in February. For now, even though the labour market is softening in NSW in terms of employment unemployment is holding the record low with the support of falling participation. NSW has had a great degree of weakness in cyclical industries than other states at this point in time (construction and production in particular) while it is also reporting job shedding in some structural sectors (health & education).

Unemployment is lifting in Victoria as participation there continues to drift higher. Victoria is also the state that has reported strong gains in government as well as white collar employment that is more than offsetting only modest weakness in cyclical sectors For further information please see “Some insights into the RBA employment puzzle” and “Australian employment gains have been in while collar industries”).

Outside of Victoria the other states to make a positive contribution to employment in March was Qld with +10.4k (unemployment rose to 6.1% from 5.4% on rising participation) and South Australia with +8.5k (unemployment rose to 5.9% from 5.7% on rising participation).

March was a positive update from the Labour Force Survey suggesting that the non-cyclical side of the economy (we suspect the ongoing rollout of the NDIS is supporting gains in not just health professionals but also in white collar professionals) is providing ongoing support for employment gains especially outside of NSW.

But note, the state that is on the forefront of the downturn in dwelling investment, NSW, has seen trend in employment gains slow from 50.5k per month in January to 13.7k per month in March. We are closely watching the impact that the downturn on construction, and the impact of falling house prices will have on consumption, will have on the cyclical employment in that state.


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