After last month’s stellar jobs data (see here for commentary) it was widely expected that the November data would show a decline in employment and a possible move in the unemployment rate back up to 6%. Nothing could have been further from the numbers we saw this morning!
The ABS headline seasonally adjusted series showed a massive 71,400 new jobs in November (of which some 41,600 were full-time). Even allowing for a minor downward revision in the Oct numbers (from +58,300 to +56,100), this came as a very big shock to the market. The seasonally adjusted unemployment rate, rather than rising back up to 6%, actually fell to 5.8%. The Participation rate was also up strongly (to 65.3) which will have kept the drop in the unemployment rate from being even more of a surprise. Given the extreme nature of both Nov and Oct’s numbers there will be plenty of scepticism directed at these numbers. But before we write-off the whole report as “not worth the paper’s it’s written on” (as some are already doing), let’s take a look at the Trend series; this is the series that the ABS recommends people use, although they tend not to because it doesn’t often throw up the kind of headline-grabbing numbers one gets from the seasonally adjusted data!
The Trend shows jobs were up 25,300 in Nov with Oct revised higher to +29,500. The Trend unemployment rate was 6% in Nov (unchanged from a downwardly revised 6% in Oct). This looks far more believable, although far less exciting. Trend jobs growth since the start of the year now stands at 274,100, or 24,900 per month; i.e. about the level seen in Nov. What this series tells us (apart from the fact that we need to take the seasonally adjusted data with a large handful of salt) is that the labour market has been on a steady, and healthy track since about the middle of last year.
In Queensland the pattern of very strong seasonally adjusted data is repeated. Nov saw an extra 7,500 jobs added (with 11,300 new full-time positions) after Oct’s gain was revised very slightly higher to 11,900; and the unemployment rate down to 5.9% (with Oct revised from 6.2% to 6.1%). If we consider the QLD Trend data we see jobs up by 5,100 (with Oct revised up to +6,200) and an unemployment rate of 6.1% (Oct revised to 6.2%). Trend jobs in the Sunshine State are up 54,400 since the start of the year; or 4,940 per month; i.e. about the level seen in Nov. As is the case nationally, employment conditions in Queensland have improved since mid-2014, although not at quite the rate we have seen nationally. The second chart below demonstrates the “catch-up” we are seeing in jobs as their rate of growth continues to exceed that of the working population.
The markets have responded to the strong data by discounting virtually any remaining possibility of a rate cut from the RBA, this has seen the A$ jump by about a whole US cent.
Regional labour market data will be released next Thursday, when we shall see if these positive results have been reflected in the North.