Today’s ABS Labour Force data for October is, on the face of it, reasonable. However, when we dig deeper we see a significantly weaker picture. The headline (seasonally adjusted) unemployment rate in Australia remained stable at 5.6% (mkt expected 5.7%) and we saw an additional 9,800 jobs added. However, we need to consider that the Sept data, which originally showed a loss of 9,800 positions, has been revised down to a 29,000 drop. As we noted last month (see here) the reason for the apparent strength in the face of weaker jobs was the decline in the Participation Rate. This is again the culprit with the Sept rate being revised lower and remaining low this month at 64.4.
The only bright note in the data is the pick-up in full time jobs (+41,500) but this must be tempered by the realisation that we lost 74,300 full time positions in Sept and they are down 34,700 in the past 12 months.
If we consider the Trend data we see the weaker story readily confirmed. Trend employment fell by 1,000 (and Sept was revised down from +3,900 to just +100). This is the first decline in Trend employment since November 2013.
If we thought things looked worse then the headline in Australia, then this is even truer when we look at Queensland. Here we see the headline (seasonally adjusted) unemployment rate drop sharply to 5.8% (after Sept was revised up to 6.2%) despite a decline of 16,900 jobs. Sept employment was also revised much lower from a 4,100 decline to a thumping loss of 13,600. So what gives? It’s the Participation Rate here too; which has fallen to 63.3…this is the lowest level in over 23 years!! The Trend series confirms the weakness. Trend jobs have fallen by 5,400 and September (which had originally shown a small increase as the first such increase in some time) was revised to a 5,300 drop; and have now fallen for 10 consecutive months. All this despite the Trend unemployment rate dropping to 6.0%.
The opportunity for spinning these numbers whichever way a politician fancies clearly exists. However, as the second chart below makes abundantly clear, there is really NOTHING good about this data for Queensland. With the large negative revisions we have seen in this month’s data we expect to see our own Conus Trend data for the QLD regions looking weaker when data is released next week.