Today’s jobs data for August from the ABS has come in well below market expectations, but a decline in the Participation Rate has seen the headline unemployment rate fall anyway.
The markets had been expecting employment to grow by about 15,000; instead it’s fallen by 3,900. However, before we get too excited (or depressed) about what looks like a very weak number there are some mitigating factors. Firstly all the decline has been in part-time jobs; full-time positions were up 11,500. Secondly, despite the low number for August, employment has grown by more than 180,000 over the past 12 months at an average of 15,000 per month. In Trend terms employment has grown by closer to 16,000 per month this year, or at 1.6%. Although this could hardly be described as strong, neither is it particularly weak (as the second chart below makes clear).
The headline seasonally adjusted unemployment rate (which had been expected to remain stable) has fallen to 5.6%; the lowest level since July 2013. However, this is based solely on the decline in the Participation Rate to 64.7 (from 64.9). The Trend unemployment rate remains stable at 5.7%
Taken together this data isn’t as weak as it at first appears; a fact confirmed by the fact that the A$ barely moved following the announcement, falling just 0.1 US cent.
In Queensland we finally see Trend employment growth turn positive for the first time in 7 months (by just 600). The seasonally adjusted data saw 7,600 jobs lost but, as was the case at a national level, full-time employment actually increased by 8,800. The headline unemployment rate rose to 6.2% while the Trend rate remained at 6.3%.
Had there not also been a sharp reduction in the Participation Rate in Queensland (down to 64.6, a new 12 year low) we would have seen the unemployment rate moving higher still.
Nevertheless, as we see below, Trend employment has finally moved into positive territory.