Jobs Stable, Sales Up, Strength in Wood Products
Seasonally adjusted employment ticked up again in June 2015, with 11.768 million people employed, a rise of 0.1% in the employment participation rate. Unemployment also rose 0.1%, hitting 6.0% on a seasonally adjusted basis, or 756,100 people. This general stability and modest ongoing reduction in unemployment levels is feeding in to increasing retail sales, which have risen 4.6% for the year ended May 2015.
As the chart below shows, Australia’s seasonally adjusted employment has been rising very gradually for at least four years. The combination of the blue (part time) and the red (full time) bars shows these gradual changes and provides details of the balance between the two major forms of employment.
For further details, go to the FWPA Data Dashboard.
Back in July 2011, part time employment accounted for 29.7% of total employment. In June 2015, that proportion had risen to 30.7%. At the same time, as the green line shows in the chart, the participation rate (the proportion of people in or actively seeking employment) has declined from 65.4% to 64.8%.
It is important not to over analyse this headline data, but it is relevant to note that despite unemployment – people out of work altogether – being largely stable, there is some evidence of increased under-employment in the Australian economy. That is, at least some part time employees would like more hours and more people would like work, but are not actively seeking it.
Though it is difficult to absolutely quantify, there appears to be more labour capacity in the economy than is currently being deployed.
However, the unemployment rate has fallen slightly over the last year, meaning there are more people in employment, but a larger proportion are working less then optimum hours (in an economic sense - it might suit the individuals perfectly well!)
In some respects, this is recognised in retail sales data, with total retail sales up 4.6% for the year ended May 2015, as the chart below displays.
In May 2015, there was a modest 0.3% rise in retail sales, which fed into the now apparently rising annualised retail sales growth.
As the trend line shows, retail sales have been growing since late 2013, but slumped through the final quarter of 2014 and the beginning of 2015, before commencing what to date has been a soft recovery, with a mix of low monthly growth and even contraction in April 2015.
It is important to go beyond the headlines and examine some of the selected industries available on the FWPA Data Dashboard. It is here we can observe that conditions for sectors of interest to FWPA members are performing better than the total of all industries and have been doing so for more than a year.
For instance, retail sales of Hardware, Building and Garden Supplies were down 1.7% in May, 2015 compared to the previous month, but are up 7.7% for the year ended May 2015, measured on a seasonally adjusted basis. Additionally, retail sales in the Furniture and Floor coverings sector (the blue bars) were up 1.2% in May 2015 compared to previous month and 10.8% year ending on a seasonally adjusted basis.
The narrative for these stronger, sector-specific retail sales makes intuitive sense. After a sustained period of growth in new residential dwelling approvals and construction and increased lending for those purposes and for alterations and additions, households are consuming more of the products that make houses into homes and doing so from a marginally stronger employment standpoint.
For the forest and wood products sector, retail sales data appears to provide confirmation of the housing data. How long retail sales growth will outstrip the total of all industries is currently a matter for conjecture, dependent upon how long the housing boom continues.
For further details, go to the FWPA Data Dashboard.
