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Economists expect wage lift as jobs surge


The number of people in employment surged in August, building on the strong results of previous months and raising expectations among economists that wages growth will eventually rise as well.

Employment jumped by 54,200, more than double what economists expected and included a 40,100 increase in full-time workers and a 14,100 rise in part-time work.

The jobless rate remained at 5.6 per cent for the third month in a row.

"This is a good news story ... our wage growth will eventually pick up as well," Deloitte Access Economics economist Chris Richardson told AAP.

Australian Chamber of Commerce and Industry boss James Pearson agreed.

"We have seen profitability start to rise, we have seen underemployment get soaked up because firms are in a position to offer their workers more hours," he told reporters in Canberra.

But for this to continue it will depend on profitability being sustained, productivity lifting and wage increases being affordable.

Mr Pearson also issued a plea to the Turnbull government

"We need policy certainty on energy," he said.

Thursday's labour report also includes a quarterly update on underemployment - people in work but seeking additional hours.

In August, the number considered underemployed was 1.11 million, down from 1.12 million in May, taking the rate to 8.6 per cent from 8.8 per cent.

The underemployment rate struck a record high of 8.9 per cent in February.

The latest Westpac-ACCI industrial trends survey also showed Australia's manufacturing sector is benefiting from an upswing in government infrastructure spending, stronger world growth and a relatively low Australian dollar supporting exports.

The survey's composite index rose 1.1 points to 66.1 in the September quarter, extending a rebound from a dip to 55.1 in June 2016 that coincided with the federal election.

Westpac senior economist Andrew Hanlan expects manufacturing conditions to remain favourable for at least the rest of the year.

"I think the economy has gained momentum since 2016," he told reporters.