The “rate cuts loom” mob among the commentariat took a bit of a blow with the November jobs data from the Bureau of Statistics this morning revealing a surprisingly solid rise in new jobs of more than 42,000, seasonally adjusted. The news pushed the dollar higher and puts the weight on the rate cut enthusiasts led by Westpac’s Bill Evans and economists at the NAB and other banks (but not at St George or CommSec). The 42,000 new jobs reported by the ABS were considerably more than the 15,000 suggested by the market, and estimates of a fall from a handful of forecasters.
Of course the recent problems with the accuracy of the figures will make analysts cautious about the veracity of these estimates, especially the “rate cut looms” mob. The unemployment rate edged up “less than 0.1 percentage points to 6.3%”, according to today’s report from the Australian Bureau of Statistics. That’s the highest since March 2002. This could be seen (as the rise in the participation rate hints at) that more people have returned to looking for work.
But if the figures are anywhere near accurate, then it’s clear employment isn’t sliding — despite weakening business conditions and confidence and weak consumer confidence. But there were a couple of points about the data which confuse the picture. But it’s clear the jobs market is still sluggish, with little dynamic growth. But it is not shedding jobs, despite continuing employment losses from the resources sector as companies cut costs or end contracts.
The ABS said the seasonally adjusted labour force participation rate increased 0.1 percentage points to 64.7% in November 2014, which is a small positive from the report. Offsetting that was a 0.3% fall in the seasonally adjusted number of hours worked to 1,610.6 million hours, which seems a little at odds with the rise in employment.
The ABS reported the number of people employed increased by 42,700 to 11,637 million in November 2014 (seasonally adjusted). The increase in employment was driven by increased part-time employment for females (up 36,400) and full-time employment for males (up 23,300) offset by a fall in female full-time employment (down 21,400). Total full-time employment increased, up 1,800.
The ABS said the seasonally adjusted number of people unemployed increased 4,700 to 777,700 in November. The ABS said:
“… [the] seasonally adjusted underemployment rate was 8.6% in November 2014, an increase of 0.3 percentage points from August 2014. Combined with the unemployment rate of 6.3%, the latest seasonally adjusted estimate of total labour force underutilisation was 15.0 per cent in November 2014, an increase of 0.6 percentage points from August 2014.”
Unemployment in NSW rose from 5.8% in October, seasonally adjusted, to 6.0% last month, remained steady at 6.8% in Victoria, fell in Queensland from 7.1% to 6.9%, eased in South Australia to 6.6% from 6.7%, rose slightly in Western Australia to 5.2%. from 5.1% and was steady in Tasmania at 6.9%.