CBA: Labour market strengthened again in May

CBA: Labour market strengthened again in May

By Gareth Aird, head of Australian economics at CBA. • Wages and salaries paid into CBA bank accounts lifted over May which points to growth in employment and hours worked in the month. • The number of CBA customers receiving the JobSeeker payment continued to decline over May which indicates unemployment fell over the month. • We forecast employment to rise by 20k in the May labour force survey following a 30.6k contraction in April.We expect the unemployment rate to fall by 0.1pptsto 5.4%on an unchanged participation rate. The May labour force survey is shaping up as a key data point for financial market participants for two reasons: • (i)it will fully capture the impact of the expiry of JobKeeper on the labour market; and • (ii)it is the last official read on the labour market ahead of the July RBA Board meeting where a decision will be announced on yield curve control and the bond buying program. From a forecasting perspective, the May labour force data is a difficult task for economists. On the one hand, measures of labour …
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