Lee Sue Ann, Economist at UOB Group, assesses the latest release of the Australian labour market report.
Key Takeaways
“Hours worked declined in Jan, falling 8.8% m/m, driven by large declines in states amid the Omicron outbreak. Still, the unemployment rate remained unchanged at 4.2%, with solid employment growth offset by a rise in labor force participation.”
“In all, the latest job report underscores the resilience of Australia’s labour market. Going forward, the pace of the rebound in hours worked and the level of employment will be crucial indicators, given the large shifts in labour force participation over recent months.”
“Further tightening in the labour market should see wage growth continue to rise from low levels, albeit at a gradual pace. We thus flag the potential risk for rate hikes by the Reserve Bank of Australia (RBA) to occur earlier, though we are still looking for that to occur in 2023.”