Jobs growth to make solid start in 2016

Jobs growth on the up

Strong employment figures in the final quarter of 2015 was underpinned by jobs growth in NSW and Victoria, particularly in services sectors like tourism

The labour market is expected to have made a positive start to the new year with jobs growth booming in the final quarter of 2015. The number of Australians with a job is forecast to have risen by 15,000 in January, according to an AAP survey of 14 economists.

This follows a fall of 1000 in December, and jobs growth of 71,400 in November, after a 56,000 rise in October. The jobless rate is expected to remain flat for a third consecutive month at 5.8% – its lowest level in almost two years.

The Australian Bureau of Statistics will release its employment report on Thursday.

‘The end of 2015 provided a vote of confidence for the health of Australia’s labour market,’ ANZ economist Kirk Zammit said.

The strength has been underpinned by jobs growth in NSW and Victoria, particularly in services sectors like tourism.

Mr Zammit said the decline in the unemployment rate to 5.8% from 6.3% in the space of six months was surprising.

National Australia Bank senior economist David de Garis said the robust November and December releases took the surprise factor to a new level.

‘Employment growth (was) running at an annual rate of 2.6%, even beyond the growth rate of the economy that was 2.5% over the year to September quarter,’ he said.

‘Rarely does employment growth exceed economic growth, implying that the employment data has either been overstated, or that GDP has been understated.’

Mr de Garis said variations in the ABS survey sample could inflate the size of January’s jobs growth figure. ‘Watch out for another unbelievable employment print,’ he said.

The latest ANZ job advertisements survey, a key indicator of employment growth, showed the number of jobs ads in January rose 1%.

Job ads were up 10.8% on the same month a year ago, and ANZ chief economist Warren Hogan said there’d been a broad upswing in hiring intentions since early 2014.

‘Of the 25 monthly readings since January 2014, only five have been a contraction,’ he said.

The participation rate, which refers to the number of people either employed or actively looking for work, is expected to have risen to 65.2% from 65.1% in December.

AAP