Our take on the latest Labour market statistics (Thu 7 Feb 2019)
Wage inflation up marginally to 1.9%pa
Unemployment up to 4.3%
Employment growth slowed to 0.9%pa
The key numbers...
- Wage inflation again failed to materialise, but our expectations remain for wage cost growth to increase to above 2.0% as firms are forced to pay more to attract and retain workers.
- We expect unemployment to remain low over the next few years at just above 4%, with the tight labour market conditions continuing.
- We don’t expect today’s release will change next week’s official cash rate review. We expect the next interest rate move will be a rise to 2.00% in late 2019.
Unemployment rate
Seasonally adjusted, % of labour force
...and our reaction
- Wage inflation remained stubbornly below 2.0%pa in December, matching consumer price inflation with a 1.9%pa increase.
- Although the unemployment rate rose to 4.3% in December, the labour market continues to remain at its tightest since the Global Financial Crisis.
- Employment growth was at its slowest since 2013, coming in at 0.9%pa after averaging over 3% over the last six years.
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