Australia’s jobless rate likely declined in February, payrolls move towards underlying trend

The employment data for Australia has been unusually volatile in the last five months, with weakness in September giving way to larger gains in the subsequent two months. This was followed by unexpected moderate falls in December and January. Australia’s report for February is likely to show that labor market continued to remain strong, though at a moderate level. Payrolls are likely to have increased by about 12k, which is equal to a 1.2% annualised rate, slightly below the underlying trend in response to the solid gains in Q4.

Even if this will be less than the 20k monthly demographic trend rise in workforce, the jobless rate is expected to have declined by 0.1 percentage points to 5.9% after a recent solid growth in labor force. ABS implies that sample rotation is expected to have a weakening impact on reported unemployment, indicating a small fall in the participation rate.