The odd glimmer of light in the January jobs report yesterday, with the unemployment rate up to 6%, with 3,700 jobs estimated to have been lost last month.
The overall tone of the figures from the Australian Bureau of Statistics was again patchy, with mostly gloomy signs.
But that’s not to say it was as gloomy as the continuing news reports about job cuts would suggest. Headlines saying the unemployment rate was the 6% was the highest in a decade, were disappointing, but not unexpected except by many economists who had forecast 10,000 or so new jobs and the jobless rate to remain steady at 5.8%.
The headline and overall tone of the report was enough to knock the value of the Aussie dollar down by close to a cent to less than 89.40 USc (so much for all the bravado earlier in the week).
And the stockmarket drifted lower after the news was released, and then struggled for the rest of the day.
Those glimmers – hours worked jumped and higher part time workers (in seasonally adjusted terms) – suggest many employers remain undecided about the outlook for their business.
Because they don’t know whether to hire or fire – more part time work is handed out to existing full time employees, or more part timers are hired, while they wait and see how demand is going. This could explain the higher number of hours worked last month.
If demand falls firings start, if demand rises then employers slowly build up hours and move more people to full time work.
With sackings to come in the car building and mining services sector, as well as among some sections of the service sector, it’s hard to know just how the labour market is placed at the moment.
The Reserve Bank knows that: it sees unemployment rising this year, as does the government. But will it hit 6.25%, which is the current estimate, or rise past that level?
The gloomsters would say it will rise, the labour market would suggest a ‘maybe’ at the moment. The labour market has been showing a lot of resilience in the past year, despite the job losses.
Coupled with the continuing decline in wages, and what seems to be an upturn in business confidence and conditions (as seen in the December and January business surveys from the National Australia Bank), there’s a chance that the small rise in part time work and the extra hours worked is a positive, not a negative.
Jobless rate worsens, but there are still a few glimmers of light
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The participation steadied at 64.5% seasonally adjusted, which again can be viewed as a small positive in that it could be telling us that there’s a bit more confidence among workers about the outlook, so they are still looking for work if they are unemployed.
Seasonally adjusted, the ABS said the number of people employed fell 3,700 to 11.46 million in January. "The decrease in employment was due to decreased full-time employment, down 7,100 people to 7,953,000, offset by increased part-time employment, up 3,400 to 3,506,500.
"The decrease in total employment was driven by decreases in male and female full-time employment and female part-time employment," the ABS said.
The number of people unemployed increased by 16,600 people to 728,600 in January.
The seasonally adjusted aggregate hours worked series increased in January by 20.5 million hours to 1,635.8 million hours.
Now that could be just the kinks in previous months being reworked, or it could signal more hours were worked by more people doing part time jobs.
On a trend basis which is designed to smooth out the month to month variations of the seasonally adjusted figures, the jobless rate remained just before 6% (but let’s call it that when the figure is rounded up).
The trend participation rate eased to 64.5%, the number of hours rose to 1,622.4 million hours and the unemployed rate edged up to 717,700, not more than the level in December.
Looking at the states: NSW remained steady at 5.8%, but in Victoria unemployment rose 0.2 points to 6.4%, albeit on the back of an 0.2 point rise in participation. Queensland had a bad result with unemployment up 0.2 points to 6.1% despite a fall in participation of 0.3 points.
Things were more positive for South Australia and Tasmania: in SA unemployment fell 0.2 points to 6.6%, although there was an 0.2 fall in participation; Tasmanian unemployment was steady at 7.6% despite a big rise (0.5 points, but it’s a small sample size) in participation. IN WA unemployment went up 0.5 points to 5.1% off a minimal rise in participation.
