Regional labour force data
The Australian Bureau of Statistics (ABS) has released trend (annual average) data on regional labour markets. Unemployment rates remain high across regional Queensland and remain low across many Sydney regions. Unemployment has averaged just 2.7 per cent in the Eastern Suburbs of Sydney over the past year.
What does it all mean?
Unemployment is historically low on average across the country. But there is still plenty of work to be done by Federal and State governments and by the Reserve Bank in generating stronger growth and thus reducing jobless rates even further. Encouragingly, unemployment rates continue to improve in Tasmania and jobless rates remain low in inner city regions of Australian capital cities. Geelong is also telling a positive story.
What does the data show?
The region with the highest unemployment rate on average over the past year has been the 'Queensland Outback'. The jobless rate of 13.7 per cent is the highest in around 17 years of records. Still it is important to note that there would greater uncertainty about the data given low sample sizes. Mandurah in Western Australia is next at 10.5 per cent from Townsville at 9.7 per cent.
At the other end of the spectrum, the jobless rate averaged 2.7 per cent in Sydney’s Eastern Suburbs in the year to July, from Sydney’s Northern Beaches (2.8 per cent) and Riverina (3.3 per cent).
The data does highlight the strength of the NSW economy at present – especially the housing-driven Sydney economy.
Encouragingly the inner city of Brisbane (3.7 per cent) and Perth inner city (3.8 per cent) are amongst the regions with the lowest unemployment rates across the country.
What is the importance of the report?
The Australian Bureau of Statistics releases detailed job market data on a demographic and regional basis each month. Industry data is released each quarter. The data is important in tracking industry and regional performance levels and gauging the outlook for consumer-focused stocks.
What are the implications for interest rates and investors?
There is still scope to run the economy at a faster pace. Too many regions have unemployment rates above 6 per cent and certainly there are no broader signs of wage pressures apart from home building trades.
The question is whether another rate cut can drive the growth. It may be that some form of joint monetary-fiscal policy would be more successful in lifting growth rather than relying on each policy individually.
CommSec is pencilling in another rate cut in November because low inflation allows the economy to run the economy at a quicker pace.