Once again the monthly jobs report from the Australian Bureau of Statistics has shown an ability to confuse and upset thinking about the Australian economy. It’s been a trend we have seen, off and on, for much of the past three or four years, with big swings in the occasional month and then the complete surprise. And, once again, the seasonally adjusted data is very different to the story from the “trend” figures which try to smooth out the volatility of the monthly figures.
Put the September report, released late this morning, in the complete surprise basket. The seasonally adjusted data is a mass of contradictions.
Unemployment jumped sharply (by 0.3%) to 5.4%, which will create big headlines and bad news for the federal government. But the smarter journalists will look closer at clear signs the report is much stronger than the headline rise in the jobless rate would indicate.
The trend figures give us a little more clarity: the unemployment rate is steady at 5.3% in the month, employment is down, unemployment up, the participation rate is steady (at 65.2%) and there’s been a fall in the number of hours worked in the month. In short September was much like August and most months this year on a trend basis — weak to sluggish growth, but not a collapse in job creation, as some more gloomy forecasters have been writing.
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Overall, the seasonally adjusted figures show the jobless rate rose because more people are looking for work, a reversal of the situation we have seen on several occasions this year where there has been a contraction in the number of people looking for work, which prompted a fall in the jobless rate. A 0.2% rise in the participation rate to 65.2% (seasonally adjusted) is another sign of the greater confidence. On top of that the jobs machine that is the Australian economy created far more new jobs last month than most analysts had forecast, even the odd optimist.
The ABS reported there was a rise of 14,500 (to 11,512 million) in the number of people employed last month: “The increase in employment was driven by increased full-time employment, up 32,100 people to 8,107,000, and was offset by decreased part-time employment, down 17,700 people to 3,404,900. The increase in employment was driven by increased female full-time employment, up 32,100 to 2,876,300.”
There was also a 38,800 increase in the number of people unemployed (to 662,700) in September. The fall in part-time jobs and rise in full-time employment is usually seen as being upbeat because it could be that more employers are turning part-time work into full-time gigs because of rising demand or more confidence.
Analysts had forecast (via an AAP survey) a rise in the jobless rate to 5.2% from 5.1%, and a rise of just 5000 in the number of new jobs.
Another positive sign was a rise in the aggregate hours worked in September of 7.6 million hours to 1,627.5 million hours. But remember the trend data had the number of hours worked falling to 1.621.1 million hours — so all up, the monthly figures confuse us, again, the trend data shows an economy bumbling along, with some momentum, and a bit of underlying strength that won’t lay down and die.