August Labour Force data much stronger than had been expected

The ABS Labour Force data for August has shown an unexpected jump in the number employed (up 111,000 versus expectations of a 40,000 fall, and a 4,500 upward revision to the July data) and a fall in the unemployment rate to 6.8% (from 7.5%). Participation was slightly higher and the hours worked per capita figure also increased slightly. Employment is now down 2.54% for the year.

In Queensland we also saw a solid increase with employment up 18,000 (after July was revised to a 1,700 increase from a previously estimated fall of 3,700) which saw the unemployment rate drop to 7.5% (from 8.8%). In the Sunshine State participation fell (although July’s original estimate was revised higher) but the hours worked per capita still managed a solid improvement. Employment is now down 3.35% from a year earlier.

Although nationally almost 33% of the gains in employment were in full-time positions, in QLD full-time jobs made up just 1% of the employment gains.

Today’s numbers cast some doubt on the RBA’s expectations of the unemployment rate getting as high as 10% by year-end. As regular readers will know, our own modelling has been suggesting a much lower unemployment rate. After incorporating this latest data into our model we are now expecting the national unemployment rate to reach somewhere between 7.2%-7.7% by year-end. In Queensland we expect to see the unemployment rate between 7.8%-8.4% by December.

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