Today saw the release of the ABS labour force data for Jan. What it showed was a drop of 12,200 jobs (seasonally adjusted) and an unemployment rate that jumped from 6.1% to 6.4%. However, even within these wildly volatile seasonally adjusted data are signs that we need to be careful before getting to carried away about an unemployment rate that is the highest it’s been in more than 12 years. Let us not forget that just last month we were writing about the surprisingly strong jobs growth witnessed in the Dec data (see here). Well, that huge uptick in jobs in Dec has just been revised UP in this release by another 5,000.
As we know, there is some considerable concern surrounding the seasonally adjusted ABS series and we really should, therefore be focusing our attention on the Trend series. Here we see quite a different story. 15,200 jobs were added in Jan after Dec was revised up (by almost 3,000) to 17,300. In the past 12 months the Trend series shows us 162.700 new jobs added at a rate of 13,600 per month; this is actually pretty healthy growth in employment. The Trend unemployment rate remains unchanged in Jan at 6.3% (having seen Dec revised up from 6.2%). In the past 12 months the employment to working population ratio has been as high as 61.0, as low as 60.5 and currently sits at 60.7.
The labour market in Australia has clearly weakened but jobs growth remains fairly robust (just not quite robust enough to keep up with growth in the working population). The headline numbers do not show the whole story and we need to keep our focus on the Trend data.
In Queensland I noted last month that the surge of 22,500 new jobs (seasonally adjusted) looked “too good to be true” so it is no surprise to see jobs fall by 7,100 this month. However, also worth noting that the Dec data was only revised down by 100 and still shows as a 22,400 increase! The headline unemployment rate has jumped to 6.5% while Dec was revised up to 6.2%.
However, as is the case at a national level, the Trend series is a very different kettle of fish. Here we see an increase of 1,500 jobs, with the Dec decline of 600 revised to a 400 increase. The Trend unemployment rate has fallen to 6.5% (from 6.6% where it had sat for the past 5 months). These increases break a 6 month streak of falling Trend jobs data in QLD and it’s the first fall in the Trend unemployment rate since Sept 2013. Jobs growth remains perilously weak in QLD (given that our working population is increasing by approx 5,000 per month), but it is at least a glimmer of a hope for improvements to come. The second graph below shows how jobs growth in QLD has failed to keep up with the growth in the working population since the impacts of the GFC were fully felt in mid-2008.
UPDATE: Gene Tunny at Queensland Economy Watch has also posted (twice; here and here) on the jobs data. Also, as reported in Business Spectator, Glenn Stephens is stressing the need to keep our eyes on the Trend rather than getting too excited about individual monthly moves…quite!