The Australian jobs market remains solid across the economy, with the weaker bits in retailing and manufacturing more than offset by the rapidly growing sectors such as resources, healthcare and education.
Australian Bureau of Statistics figures out yesterday show that a total of 46,300 full and part time jobs were added last month, more than offsetting the loss of 29,000 in December.
That was the largest number of jobs created for over a year.
The employment data adds to the growing impression that the Australian economy is gathering pace after being whacked last year by the floods and cyclone Yasi in January and then the uncertainty from Europe later in the area and a slide in business and consumer confidence.
The unemployment rate, seasonally adjusted, dipped to 5.1% (5.2% on the smoothing trend basis) from 5.2% in December (which had been revised down from 5.3%, as had the rate in November.
Despite considerable publicity about job losses (the 500 jobs lost at Qantas yesterday and the 1,000 at the ANZ earlier in the week are the latest manifestations of this belief), the January jobs data from the ABS was strongest for more than a year, reflecting the strength in the economy as a whole.
The strong jobs data confirms the rightness of last week’s decision by the RBA not to cut its cash rate.
Unless there’s a significant worsening in Europe or in the local jobs market in the next few months, you can just about rule out any more rate cuts.
In fact a rate rise might be in the offing later in the year if we get more months like January for jobs
That doom and gloom has continued and AAP produced a table of recent job losses yesterday.
Roughly 6,000 jobs were lost or could be lost according to the spate of recent announcements from companies large and small, from Qantas, to Caltex, Westpac and the ANZ, not to mention Alcoa.
And everyone of those losses have generated headlines, grim predictions, moans and groans from unions, employers and those involved (who have the biggest reason to gripe, but also to be confident).
But compare that to the 12,300 full time jobs created in January and the more than 46,000 new jobs for the month.
The jobs market is weak, especially in finance, retailing and some areas of manufacturing, but it’s strong in others (that is constantly overlooked by the jobs alarmists).
The ABS said there was 11,463,900 people employed in January, which is the highest ever recorded.
"The increase in employment was driven by increased part-time employment, up 34,000 people to 3,400,800, and an increase in full-time employment, up 12,300 people to 8,063,100," the ABS said yesterday.
"The increase in seasonally adjusted part-time was driven by an increase in female part-time employment whereas the increase full time employment was driven by an increase in male full-time employment," the ABS said.
That reversed the trend in December, when it was the absence of part time jobs for females in the group 15 to 24, that helped produced the sharp drop in that month.
It wasn’t a case of jobs not going, it was more a case of jobs not appearing at a time when there usually is a surge in part-time positions for the Christmas rush.
The number of people unemployed fell 15,300 people to 614,200 in January, the ABS reported, another strong point.
The ABS monthly aggregate hours worked series showed a decrease in January, down 23.1 million hours to 1,593.9 million hours, which more than offset the 5.6 million hour rise in hours worked in December.
That seems to be reflecting the rises in hours worked in the past couple of months, and the strong rise in part time work last month.
While Europe and Greece remain big concerns (and why the market tanked yesterday), the economy is solid, as new RBA Deputy Governor Phil Lowe said in his first speech for 2012 in Sydney
"… the Australian economy started 2012 in relatively good shape. Growth has been around trend and inflation is consistent with the target, and there are reasonable prospects for this to continue. We also have much more flexibility to deal with unfolding events than almost any other developed economy."
Inflation is down (and will drop at the headline level for the next two quarters), but the cost of some items called non-tradables is starting to concern the RBA because they are not impacted by the value of the dollar – these include rent, communications and utilities.
There was a noticeable pick up in housing finance in December, after the two rate cuts, but it is still at 34 year lows according to some measures and is causing the banks some angst, as is the higher funding costs, domestic and offshore.
While retailing is sluggish, it is not a disaster area that many media writers and industry players would have us believe.
Yes department stories and boutiques are doing it tough. But there are plenty of exceptions.
Wesfarmers’ Coles, Bunnings, Kmart and Officeworks all produced higher profits yesterday (Target was the exception) and the performance once again underlined the side of retailing you don’t get to read a lot about at the moment: that it is not all doom and gloom.
Women’s fashionwear retailer Noni B lifted profit by a bit more than it expected in the six months to December.
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