Australian jobs grew by a surprising 50.2K, compared to consensus estimates of 20K, with total employment reaching 14.4 million.
But employment per capita remains steady at 64% because of the huge swell in immigration.
The unemployment rate ticked up to 4.1%, while trend remained steady at 4.0%, as the participation rate grew.
Total hours worked increased to 1.97 billion, a 1.3% increase in the trend since June 2023.
Average hours worked (trend) declined to 136.6 hours in June, from 138.6 hours 12 months ago, reflecting slowing demand growth.
Conclusion
Westpac believe that the strong June labor report points to a soft landing ahead. We are more skeptical. Soft landings are often promised and seldom materialize.
China has reported deflation for the fifth quarter in a row. When your biggest trading partner suffers from deflation, it generally is bad news for you as well.
Acknowledgements
- ABS: Labour Force, Australia
- Ryan Wells, Westpac: June Labour Force: ‘soft’ landing in sight
- Adem Tumerkan: China Deflation Chart
Colin Twiggs is a former investment banker with almost 40 years of experience in financial markets. He founded PVT Capital (AFSL number 546090), which provides income and growth strategies to wholesale clients.
Colin also co-founded Incredible Charts and writes the popular Patient Investor newsletter.
Using a top-down approach, Colin identifies macro trends in the global economy and then combines fundamental and technical analysis to evaluate opportunities in sectors that stand to benefit.
Focusing on interest rates and financial market liquidity as primary drivers of the economic cycle, he warned of the 2008/2009 and 2020 bear markets well ahead of actual events.