Unemployment tipped as flat at 5.8% in Jan

(Australian Associated Press)

The unemployment rate is expected to have been flat at 5.8 per cent in January, with jobs growth subdued but not many people looking for work.

The number of Australians with a job is expected to have risen by about 15,000 in the first month of 2017, after jumping by 13,500 in December, according to the median forecasts of 14 economists surveyed by AAP.

TD Securities chief Asia-Pacific macro strategist Annette Beacher said January is seasonally the weakest month for the labour market as summer jobs growth grinds to a halt.

She said that despite benign jobs growth in the month, the headline unemployment rate would likely be flat because of a fall in the participation rate – the proportion of the working age population either employed or looking for work.

“Assuming a dip back in the participation rate from 64.7 to 64.6 per cent leaves the unemployment rate at 5.8 per cent,” Ms Beacher said in a note.

“We will also be watching closely for the composition of hours work, looking for a pick-up in full-time (work) that the RBA (Reserve Bank of Australia) noted this week.”

Commonwealth Bank senior economist Gareth Aird said the jobs market had been softer over 2016, but the latest National Australia Bank business survey and the ANZ job advertisements surveys, a rise in commodity prices and higher capacity utilisation indicated jobs growth could pick up, at least temporarily.

However, he warned that fragile consumer confidence and the uncertain global geopolitical outlook posed risks.

“So, while the business surveys suggest that near-term employment growth should improve, that picture can change quite quickly, particularly given that the improvement in business confidence and increase in capacity utilisation has yet to translate into actual investment,” Mr Aird said in a note.

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