Daily Commentary BY THE CURVE TEAM –

Employment Recovery Continues

22nd of January, 2021

Employment rose in line with expectations over December but the composition of the labour market remains impacted.

50 000 jobs were gained over December, leaving the unemployment rate at 6.6% from 6.8%. The participation rate also continues to gain, being at 66.2% which is higher than pre covid levels.

This continues the remarkable employment recovery since lows in May. Only 88 000 jobs need to be regained for employment to return to pre covid levels and encouragingly those working zero hours is back near pre covid levels.

Full time employment comprised 36 000 of the job gains for December after being slow to recover. However, 112 000 full time jobs are needed to recover to pre covid levels.

In contrast, part time employment is up 24 000 on pre covid levels. With this shift in. composition hours worked and underemployment will take on new significance.

Hours worked is still down 1.4% on March levels and underemployment is at 8.5%, 0.3% points higher than last year. The casualisation and shift to part time work could make employment more volatile as it is easier to let go these types of employees.

Retail sales for December are released today.

Josh Stewart

Associate- Money Markets