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Australia's unemployment rate has fallen to a four-and-a-half-year low at 5.4 per cent, even though a disappointing 3,700 jobs were created last month.
Key points:
- Full-time employment +24,300, part-time employment -20,700. Net change in October +3,700
- Queensland the only state to gain jobs +12,600. Victorian employment -14,600
- In trend terms ACT has the lowest unemployment rate at 3.8pc, Tasmania has the highest at 6pc
The last time unemployment was this low was February 2013.
Economists generally expected unemployment to remain steady at 5.5 per cent, with the typical forecast centring on the creation of 17,500 jobs.
The good news in the jobs numbers, aside from the fall in the seasonally adjusted unemployment rate, was the addition of 24,300 full-time jobs, while 20,700 part-time jobs were lost.
Reflecting the rise in full-time jobs, monthly hours worked rose 0.3 per cent.
The bad news was that the unemployment rate fell because the participation rate — the percentage of people in work or looking for it — dipped 0.1 of a percentage point to 65.1 per cent.
Unemployment had been stuck between 5.5 and 6 per cent for the past two years, having fallen from a peak of 6.4 per cent in October 2014.
Across the states and territories, only Victoria and the ACT recorded declines in unemployment.
Jobless drop unlikely to boost wages
Capital Economics Paul Dales said the below consensus forecast for jobs growth was not a big concern given employment has risen for 14 consecutive months.
Mr Dales cited the loss of around 4,000 jobs from the closure of the Toyota and Holden plants during October as having an impact the unexpectedly weak figures, but noted there was a more widespread softening as well.
"Employment appears to have fallen in all states except Queensland and the ACT," Mr Dales said.
"This is probably just payback from the incredibly strong run in recent months rather than anything to worry about too much."
Mr Dales said the slight fall in the unemployment rate was unlikely to do anything to start driving wages higher.
"As yesterday's release of the wage price index for the third quarter showed, this tightening in the labour market has not yet started to boost wage growth," he said.
"And the lesson from overseas is that even if the unemployment rate falls further, wage growth still won't rise much."
Topics: unemployment, economic-trends, money-and-monetary-policy, australia
First posted