Another great day for jobs: Turnbull

June 14, 2018

Philip Lowe noted the jobless rate has remained around 5.5 per cent for a year.

Strong economic growth, upbeat businesses and a renewed pick-up in hiring intentions suggest solid job gains can be expected after a sluggish start to the year.

Labour force figures for May are due for release on Thursday.

Economists expect around 20,000 people found employment in May after a 22,600 increase in the previous month.

The unemployment rate is expected to remain at 5.6 per cent.

Such expectations follow a fairly patchy start to the year, which included two months of small employment declines after the record of more than 400,000 jobs were secured over 2017.

However, the April result meant more than one million people have found employment since the coalition government came to power in September 2013, fulfilling an election promise by former Liberal leader Tony Abbott to reach that target in five years.

Despite these gains, Reserve Bank governor Philip Lowe in a speech on Wednesday noted the jobless rate has remained around 5.5 per cent for a year.

This compares with conventional wisdom that puts full employment at around a five per cent unemployment rate.

Dr Lowe told a conference in Melbourne it is possible an even lower rate could be achieved if the five per cent mark is approached at a steady pace, rather than too quickly.

"In a number of other countries, estimates of the unemployment rate associated with full employment are being revised lower as wage increases remain subdued at low rates of unemployment," he told the Australian Industry Group lunch.

"We have an open mind as to whether this might turn out to be the case here in Australia too."

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