The ABS jobs data for March has come in a lot stronger than anticipated with the headline unemployment rate falling to 6.1%. The market had been looking for a total of about 15,000 jobs to be added in March, in fact the data shows a huge 37,700 new positions (31,500 of which were full-time) and a big positive revision which also added over 34,000 to the previous two months. Adding to the brighter picture we also saw an up-tick in the Participation rate to 64.8 which is its highest level in 8 months.
The March unemployment rate now stands at 6.1% with Feb revised down to 6.2% (from 6.3%) and Jan revised down to 6.3% (from 6.4%).
There remains however a good deal of scepticism surrounding the seasonally adjusted ABS labour force data. The Trend data shows employment up 20,700 with large revisions to Feb and Jan also adding another 18,000. The Trend unemployment rate is now 6.2%, where it has been for the past 8 months. However you care to view March’s data it is strong and, we believe, will remove a good deal of the pressure for another rate cut from the RBA.
Last month we made note of the first signs of a possible jobs recovery being seen in QLD (see here) but unfortunately the data for March does not appear to carry that hope forward. The headline seasonally adjusted unemployment rate in QLD for March was 6.6% (unchanged from Feb, which in turn was revised down to 6.6%). Jobs fell by 7,900, although revisions to the previous two months compensated, at least in part, for this with revisions upward totaling 4,100. All of the decline in jobs was from the part-time sector with full-time positions actually seeing an increase of 7,600. After last month’s move up in Participation we saw a reversal in March with the PR falling back to 65.2.
However, when we consider the Trend we may be able to hang onto our improving hope. Trend employment growth was 3,400 (the same as in Feb) with January revised slightly higher to 3,500. The Trend unemployment rate remained stable at 6.5% (where it has been for the past 4 months).
Last month we also commented on whether the original (unadjusted) ABS data was in fact telling a much stronger story than the adjusted data suggested (as proposed by Adam Carr in the Business Spectator). We concluded then that, despite strong nominal jobs growth, the country was simply not producing enough jobs to keep up with population growth. This month’s figures, while showing some improvement, still see jobs failing to keep pace with population growth.