The surprise 12 year high in the unemployment rate of 6.4%, reported in July’s jobs report from the Australian Bureau of Statistics has evaporated in the August data released this morning — with the rate falling back to the 6.1% rate in June and a huge 121,000 new jobs being created. But the August report comes with its own questions, with the data raising as many questions about what was being measured and reported as last month’s.
The August report not only contains a surprise rise in the number of new jobs, and of part time jobs especially — 106,000! — but the participation rate rose a remarkable 0.4%, a much larger increase than has been seen for a long time. And the 121,000 new jobs in total seem somewhat unbalanced: the amount of hours worked rose by the smallest amount measurable, 0.1 million hours.
In trend terms, which are designed to smooth out big rises and falls, the number of people employed increased by a solid 18,700 last month, but there was a rise in trend unemployment from 6.1% to 6.2%.
The peculiar data was distributed across the states. In South Australia, unemployment fell an implausible 1.3 percentage points to 5.9%, and off the back of a 0.4 point increase in participation. In New South Wales, where 45,000 jobs were ostensibly created, participation rose a whopping 0.6 points, but unemployment fell 0.2 points to 5.7%. Victoria also saw a participation rise of 0.4 points for a 0.2 point fall in unemployment to 6.8%. Queensland’s unemployment rate fell o.1 point to 6.7% while participation rose 0.5%. The west was a little calmer — unemployment down 0.2 to 5%, with just a 0.2 point rise in participation.
Nonetheless, the positive tone is in keeping with the August job ads survey from the ANZ Bank on Monday, which showed the number of jobs advertised online and in newspapers rising to a 17-month high, suggesting demand for new labour is rising more strongly than indicated by recent ABS reports.
The ABS believes the surge in employment was driven by increased part-time employment for both males (up 65,400 persons) and females (up 41,300 persons). The seasonally adjusted underemployment rate was 8.5% in August 2014, an increase of 0.7 percentage points from May 2014. Combined with the unemployment rate of 6.1%, the latest seasonally adjusted estimate of total labour force underutilisation was 14.6% in August 2014, an increase of 1.0 percentage points from May 2014.
In a commentary in the report, the ABS also attributed the sharp rise in part-time employment to the nature of the replacement panel for August. “The incoming rotation group reported a higher proportion of part-time employed persons than the rotation group it replaced, and contributed 47,000 to the increase in part-time employment. (However, the incoming rotation group contributed a decrease of 50,100 in full-time employment.) …Householders who responded in both July and August 2014… reported a net weighted increase of 82,000.”
Given that, it wouldn’t be surprising to see a fall in part-time jobs in coming months, and more volatility in the jobless rate.