There was something for everyone in the June jobs data – from the bears to the optimists – the figures contained the seeds of just about every point of view about the health of the economy.
And that was reflected in the performance of the dollar yesterday and overnight – it traded around the high 94 USc mark.
So, unemployment rose seasonally adjusted to 6% (5.9% on a trend basis), which pleased the bears, as did a rise of around 20,000 in the number of people unemployed.
And to add to this, full time employment for males was weak, while part time jobs provided the growth of nearly 16,000 in new jobs last month, the latter point helping the optimists.
And a further positive was yet another rise in the number of hours worked in the month, and a small rise in the participation rate – up 0.15% to 64.7%, according to the Australian Bureau of Statistics jobs data.
That indicates that more people joined the ranks of those looking for work (more confident), which was another positive taken from the report.
Hours worked rose 0.9% after a solid 2.1% rise in May (revised up from an original estimate of 1.7%).
In total, hours worked rose 2.1% in the year to June, but total employment was only up 0.9% in the 12 months.
That tells us employers are working people longer (and hiring more part time workers) because they remain uncertain about the strength of the economy.
The ABS said the number of people employed increased by 15,900 to 11,578 million in June (seasonally adjusted).
Jobs figures for June confirm sluggish economy
.png)
"The increase in total employment was due to increased female employment (both full-time and part-time) and increased male part-time employment, offset by a fall in male full-time employment.
"Part-time employment increased by 19,700 people to 3,515 million and full-time employment decreased by 3,800 people to 8,062 million," the ABS said.
On a state basis, Victoria saw the largest fall in seasonally adjusted employment, down 15,300 people.
The largest increases in seasonally adjusted employment were in New South Wales (up 10,000 persons), South Australia (up 5800 and Western Australia (up 5,200).
New South Wales’ trend unemployment rose to 5.6% from 5.5% in May.
Victoria’s trend unemployment rate held steady at 6.4%. As usual, Tasmania had the nation’s highest unemployment rate at 7.4%.
The AMP’s Chief Economist Dr Shane Oliver said in a note that, "While employment rose by 15,900 in June, it’s not quite as good as it looks as full time employment fell by 3,800 and a rise in the participation rate (from 64.6% to 64.7%) pushed the unemployment rate up to 6%.
"It could be a lot worse though – if the participation rate was still at its 2011 average level of 65.4% the unemployment rate would be 7%.
"While total employment is up 0.9% over the last year, full time jobs growth is running at just 0.5% year on year in contrast to part time employment growth which is running at 1.7% year on year.
"This is a sign of caution on the part of employers when hiring new staff.
"Jobs growth is clearly continuing, but at 0.9% year on year it’s not strong enough to bring the unemployment rate down and so it’s been stuck in the 5.8 to 6.0% range for 9 months now."
He said the good news though is that leading labour market indicators such as ANZ job ads and the hiring component of the NAB business survey (out on Tuesday) point to stronger employment growth ahead.
The point to be made about the jobs data is that like so many bits of data since April onwards, the June jobs report tells us nothing we didn’t instinctively feel about the economy and the uncertainty of its future direction and strength.
That’s why the Reserve Bank has monetary policy on hold for some time into the future as it waits to see what happens.
But the economy is not tanking and unemployment isn’t worsening – employment is just not growing fast enough.
And one final point – if total employment was up 0.9% in the year to June and hours worked were up around 2.1% and GDP growth comes in around 2.8% to 3%, then productivity will have improved noticeably in the financial year, with weak real wage growth, in fact a fall in real wages, and therefore unit labour costs over the past nine months.
