Turnbull declares ‘jobs and growth’ a reality as employment surges

Malcolm Turnbull is claiming credit for another surge in the number of Australians finding work, as economists label 2017 a “stellar year” for the labour market.

New data shows another 61,600 jobs were created in November, lifting the number of new jobs this year to 383,300.

It was the 14th consecutive month of employment gains, a streak not seen since 1994, prompting some economists to predict the economy may reach “full employment” next year.

“At the last election, you will all remember, we campaigned on jobs and growth,” Turnbull said in Sydney on Thursday. “Well, it was a slogan then but it is an outcome now. Our policies are restoring confidence to business and business is responding by investing, creating more jobs and hiring more workers.”

The Australian Bureau of Statistics figures, released on Thursday, show 41,900 full-time jobs and 19,700 part-time jobs were created in November in seasonally adjusted terms.

Employment rose in every state and territory, with the largest rises in Victoria (by 32,900 jobs) and New South Wales (by 28,500).

The unemployment rate remained steady at 5.4% (a five-year low) due to a jump in the number of people actively joining the labour force to look for work.

That saw the so-called participation rate rise by 0.3 percentage points, from 65.2% to 65.5% – a six-year high. If the participation rate had been steady, the unemployment rate would have declined to 5.1%.

“What these numbers mean is that anybody who was looking for a job or wants to get a better job or a different job has more opportunities to find one,” Turnbull said.

Katie Hickie, an economist from Capital Economics, said 80% of new jobs in 2017 had been full-time positions, helping to explain why average hours worked per employee is now growing at an annual pace of 0.8% – “its fastest since June and well above the five-year average of -0.2%”.

“It has clearly been a stellar year for the labour market and this will raise the annual growth rate of household disposable income from the very weak 0.5% in the third quarter,” she said.

“And while such elevated rates of jobs growth are unlikely to be sustained, most leading indicators suggest employment growth will remain decent in the coming months.”

The strength in full-time work also led to a further fall in people considered “underemployed” – employed but seeking more hours of work.

The underemployment rate declined slightly to 8.4% in August, accounting for just over 1 million workers, after hitting a record high of 8.9% in February.

The Australian Chamber of Commerce and Industry chief economist, Adam Carr, said it was clear the economy was gaining strength.

“Results like this give us confidence wage growth will pick up,” he said in a statement.

BIS Oxford Economics’ head of Australian macroeconomics, Sarah Hunter, said employment growth would likely slow in 2018, with the present rate of more than 3% unsustainable in the long run.

“But the continued strong performance … will provide some more relief to households and consumer spending,” she said, adding that household consumption ought to bounce back strongly in the December quarter.

The recent national accounts showed household consumption slipped to its slowest rate since the 2008 global financial crisis in the face of slow wages growth.

Commonwealth Bank economist Gareth Aird said the strength of the jobs market all but confirmed the next move by the Reserve Bank would be an increase in the cash rate.

“We think wages growth will lift gradually but not sufficiently so to bring a rate rise into the fray until late 2018,” Aird said.

The treasurer, Scott Morrison, will hand down his mid-year budget review on Monday, which is expected to show a smaller deficit than predicted in May, partly as a result of a revenue windfall from a strong labour market.

With Australian Associated Press