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Australian jobless number hits lowest in several years

The Australian Bureau of Statistics (ABS) has released its latest job numbers for the month of July 2018.

According to the seasonally adjusted numbers, the net number of people employed reduced by 3,900, reaching a total of 12.575 million Australians now employed.

There was a pleasing increase of 19,300 full-time employment to 8,587,500 and part-time employment decreased by 23,200 to 3,987,700.

Thankfully, the number of unemployed people looking for work decreased by 5,700 to 706,000. This resulted in the unemployment rate improving to 5.3%. It’s funny how statistics can work sometimes.

All of the employment numbers don’t always work in tandem because of Australia’s growing population. The participation rate decreased by 0.2% to 65.5%.

The seasonally-adjusted monthly hours worked in all jobs increased by 4 million hours, staying at roughly 1.75 billion hours.

So what?

Although the unemployment rate decreased, the actual number of Australians employed also decreased. I don’t think this is a great sign. One month isn’t bad, but if decreasing numbers of Australians employed becomes a trend then it could point to something more worrying.

It’s no secret that many Aussies are doing it tough at the moment. Household budgets are tight and debt is at very, very high levels.

But, the difference between a severe recession and a slight economic dip is most Australians remaining employed. If the unemployment rate suddenly jumped up that could lead to a big uptick in mortgage defaults for Commonwealth Bank of Australia (ASX: CBA), Westpac Banking Corp (ASX: WBC), National Australia Bank Ltd (ASX: NAB) and Australia and New Zealand Banking Group (ASX: ANZ). Australia currently has a very healthy employment rate, let’s hope it stays that way.

We can see how healthy the current economy is with the impressive result for consumer-facing businesses such as Wesfarmers Ltd (ASX: WES) and JB Hi-Fi Limited (ASX: JBH).

However, if a recession does happen in the future, driven by Australia’s indebtedness, this top share could be a great one to own and could generate even more profit in rough times.

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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Wesfarmers Limited. The Motley Fool Australia owns shares of National Australia Bank Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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