Australian employment growth is robust, AUD/USD supportive - Westpac

Analysts at Westpac explained that the September labour force release continued to show robust momentum in employment. 

Key Quotes:

"The 20k headline gain combined with the dip in the unemployment rate to 5.5% was an unquestionably strong update. This is particularly the case given it is the 12th consecutive positive reading for employment – the strongest run of outcomes since 1994. 

The leading indicators we track for employment suggest that annual employment growth will largely be sustained into year end. However, to our mind the bigger question is the degree of spare capacity that remains in the economy and the industry mix for employment. 

On underemployment, the latest data point we have is for August. At 8.6%, it is little changed from a year ago despite 3% jobs growth. On the mix of employment, a piece in the latest edition of Market Outlook highlights that job gains have been heavily concentrated in health, education and construction. With the latter sector to slow, this mix of job creation combined with still significant slack will keep a lid on wage gains and thus on household demand."