Australian unemployment rate improved to 5.5 percent in September, according to the Australian Bureau of Statistics report released on Thursday. The number of employed persons rose by 19,800 in September when compared with the preceding month. Full-time employment climbed by 6,100, while the number of part-time employees rose by 13,700. The participation rate, including people gainfully employed or actively seeking work, stood at 65.2 percent.
The Reserve Bank of Australia left interest rate unchanged at 1.5 percent to better stimulate growth in the services industry and offset mining deficit following plunged in global commodity prices.
However, wage growth has remained lacklustre for the most part of the year, even with the improved job market. Wages grew just 1.9 percent year-on-year. Largely weighed upon by weak wage growth in the private sector that grew 0.4 percent in the second quarter, while public sector grew at 2.4 percent over the year.
Also, rising household debt and weak wage growth are likely to slow retail sales and hurt consumer spending going forward, as wage growth is expected to remain low in the near term, especially with China, Australia largest trading partner, working hard to cut capacity in steel and cement industries in early 2018.
“The larger-than-expected rise in employment in September marks the seventh consecutive month of strong job growth in Australia and leaves little doubt on the current health of the labor market,” said Kate Hickie at Capital Economics Ltd. “That said, we don’t think this will prompt a notable pick-up in wage growth anytime soon as spare capacity remains elevated.”
The Australian dollar pared losses against the U.S. dollar to US78.59c after the released. Meanwhile, the Chinese economy grew at 6.8 percent in the third quarter.
