Australian labour market data for February released today showed a strong rebound in full-time employment and hours worked, a fall in the unemployment rate, and a small increase in participation. Officials noted that the number of people waiting to start a new job in January was larger than typical, and most off these people returned to work or commenced their new jobs in February.

The number of employed persons in Australia rose by 64,600 persons in February after a decline of 11,500 persons in January, well above the consensus forecast for an increase of 50,000. Full-time employment rose by 79,400 persons after falling by 42,300 persons previously, while there was a decline of 10,300 persons in part-time employment after a previous increase of 31,800 persons. Work hours rose 5.1 percent on the month after dropping 2.1 percent previously.

Today's data show the unemployment rate fell from 3.7 percent in January to 3.5 percent in February, just below the consensus forecast of 3.6 percent, while the participation rate rose from 66.5 percent to 66.6 percent, remaining close to record highs. Reserve Bank of Australia officials expect tightness in the labour market to persist throughout 2023, and this strength in labour market conditions will likely reinforce their view that further rate increases will be required ion coming months.

At a consensus rise of 50,000, employment is expected to rebound from a 11,700 decline in January. The unemployment rate is expected to fall 1 tenth to 3.6 percent.

The Labour Force Survey is a key economic indicator giving an overall picture of employment and unemployment. Employment counts the number of paid employees working part-time or full-time in the nation's business and government establishments. The unemployment rate measures the number of unemployed as a percentage of the labour force.

This report is used as an indicator of the health of the domestic economy. Employment trends highlight the strength in job creation and the implications for future sectoral activity. The unemployment rate is used as an indicator of tightness in labor markets and can foreshadow a future increase in wages. Labor force data provide investors with the earliest signs of industry performance. While other data are produced with a month or two delay, these data are available only a week to 10 days after the end of the latest month. Reactions can be dramatic - especially when the result is unanticipated.

The information in the report is invaluable for investors. By looking at employment trends in the various sectors, investors can take more strategic control of their portfolio. If employment in certain industries is growing, there could be investment opportunities in the firms within that industry.

The bond market will rally (fall) when the employment situation shows weakness (strength). The equity market often rallies with the bond market on weak data because low interest rates are good for stocks. But sometimes the two markets move in opposite directions. After all, a healthy labor market should be favorable for the stock market because it supports economic growth and corporate profits. At the same time, bond traders are more concerned about the potential for inflationary pressures.

The unemployment rate rises during cyclical downturns and falls during periods of rapid economic growth. A rising unemployment rate is associated with a weak or contracting economy and declining interest rates. Conversely, a decreasing unemployment rate is associated with an expanding economy and potentially rising interest rates. The fear is that wages will accelerate if the unemployment rate becomes too low and workers are hard to find.