Australia's booming employment conditions continues with 16,000 jobs created in January

Employment in Australia has exceeded expectations as it rose by 16,000 in seasonally adjusted terms in January. The country has created jobs in each of the past 16 months, the Australian Bureau of Statistics (ABS) data shows.

Australia’s latest jobs growth helped lower the employment rate to 5.5 percent from 5.6 percent at the end of last year, based on seasonally adjusted data by the ABS. Jobs creation last month has been the longest stretch seen before.

When it comes to the composition of jobs on offer, recent data shows that net full-time occupations dropped by 49,800. More people have found part-time jobs, with the numbers surging by 65,900. There were fewer people looking for work, with participation rate edging down to 65.6 percent.

The swing saw hours worked had dropped by 1.4 percent or 24.1 million hours across the workforce. Average working hours were down 2.7 percent over the year. This was the weakest reading since 2009 in the midst of the GFC-inspired slowdown.

The biggest net gain in jobs (+19,700) was recorded in Queensland, while positions were shed in both New South Wales (-21,000) and Western Australia (-8,900). Employment rate in NSW rose to 5.1 percent, although it remained the country’s lowest rate. The ranks of the unemployed shrank in Victoria to 5.6 percent.

The unemployment rate improved but still sits well above the level that often heralds acceleration in wage pressures. The recent data offers minimal signals that the labour market is turning out so tight that there are building wage pressures.

“High underemployment means that the unemployment rate will have to fall well below 5.0% before the labour market generates much wage and price inflation,” Business Insider Australia reports Chief Australia and New Zealand Economist at Capital Economics Paul Dales as saying. He added that the RBA would not increase interest rates without much more wage inflation. But still, the continued strength of the labour market will support consumption growth in 2018.

APAC economist Callam Pickering from global job site Indeed believes the report provides no near-term reason for the RBA to alter interest rates. “Labour market slack remains elevated, which helps to explain the ongoing weakness in wage growth and the cautiousness of Australian households,” he explained.

Pickering added that they believe there’s a reason to be optimistic on wages. Businesses were cashed up as some were seeing a greater difficulty in finding new staff.