Released along with the report on the July CPI was the employment report for June, and it’s certainly at odds with the prevailing market sentiment (‘000):
Here we see a picture of an economy in the pink of health, as employment jumped nearly 400k in June. That’s the largest absolute increase recorded since the series started in 2009, and quite at odds with all the other stuff flying around these days. It also appears to corroborate the acceleration in inflation – more jobs are being created, which could be leading to demand side price pressures. Or inflation could be just a factor of rising global prices, as the IMF’s commodity food price index is up sharply for June.
Nevertheless, the increase in employment in June is more than unusual, supressing the unemployment rate to below 2.8% for the first time since last year:
DOS seasonally adjusted rate of unemployment is down to 2.7%, just the second time this has been recorded since the adjusted series was introduced. The interesting thing would be if labour market pressure is translating into wage increases, and there’s some evidence that this is happening with manufacturing wages even as sales has dropped (log annual changes):
On that basis, we should continue to see sustained growth in private consumption, which would form some basis for growth in the quarters ahead.