Jobs data disappoints but QLD looks marginally better

The ABS labour force data for Sept released this morning shows a picture somewhat weaker than anticipated after last month’s pleasant surprise (see here for commentary regarding the strong Aug data). However, as we noted last month, the strong seasonally adjusted data for Aug disguised a rather weaker story hidden within the Trend numbers. This month is a similar story.

The seasonally adjusted data shows a total of 5,100 jobs were lost nation-wide during Sept, while the strong 17,400 gain in Aug was revised stronger still (to +18,100). The declines were led by full-time positions which fell by 13,900. The market had been expecting jobs to have increased by a modest 7,000 in Sept. The seasonally adjusted, headline unemployment rate remained stable at 6.2%, despite the fall in jobs, on the back of a decline in the Participation Rate to 64.9.

When we look at the Trend data we see jobs grew by 12,400 with August’s growth revised up to 16,200. However, that is the weakest Trend jobs growth in a year and well below the average for this year which sits at about 20,000. The Trend unemployment rate also remained static at 6.2%. The Trend data is highlighting a sharp slowdown in jobs growth this year (Trend jobs growth in Sept was only a little over half what it was at the start of this year) with the impact of this on the unemployment rate being diminished by a declining Participation Rate.

At a state level, things look somewhat better for Queensland. The seasonally adjusted data showed employment up by 4,600 (with August’s gains revised slightly lower) of which 3,500 were new full-time positions. With the Participation Rate remaining unchanged the headline unemployment rate fell to 6.3% with August also revised down to 6.4% (from 6.5%). The Trend data paints a somewhat more cautious outlook with jobs up 4,000 after an increase of 4,100 in August. This level of growth is close to the average 4,200 pm which we have seen this year and is a clear improvement from the story through the second half of 2014. However, as the second chart below makes clear, jobs growth is only just keeping pace with the growth of the working population, which is why the Trend unemployment rate remains stuck at 6.3%. As we have noted previously, we will need to see far better growth in jobs if we are hoping to get the unemployment rate in Queensland back to, and hopefully below, the level seen nationally (although this month’s data brings us somewhat closer to that target).

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