According to the Bureau of Statistics, Australia’s estimated seasonally adjusted unemployment rate for September was steady at 6.2% (technically it was a fall of 0.1 percentage points “based on unrounded estimates” from August).
That was despite a small fall of 5,100 in the number of people estimated to have been employed (out of 11.769 million) and a fall of 8,100 in the number of people believed to be unemployed (772,500) in the same month.
The seasonally adjusted participation rate fell 0.2 percentage points to 64.9% in September from 65.0% in August – but that’s still a solid gain on a year ago.
Offsetting the fall in full-time employment of 13,900 was a rise in part-time employment of 8,900, driven by female part-timers (everyone else fell), with male full-time employment down 11,000.
But the seasonally adjusted monthly hours worked in all jobs series increased in September 2015, up 12.2 million hours (0.7%) to 1638 million hours.
While that’s good news, it is also hard to square with the fall in employment in the month (perhaps employers lifted the hours of employees, while putting off some surplus labour rather than employing new workers).
The best performer was NSW, where unemployment fell 0.1 point to 5.9%. Victoria was up by the same amount to 6.2%; Queensland was down 0.1 point to 6.3%; South Australia recorded an 0.2-point fall to 7.7%, and Western Australia was stable at 6.1%. But both the west and SA saw sharp falls in their participation rates.
It is also interesting that the confusing September report came as the Australian Financial Review carried the views of former Chief Australian Statistician (i.e. ABS boss) Bill McLennan, who said we were not to trust the monthly labour force survey. In McLennan’s views (he retired in 2000) “the results of the last six months aren’t worth the paper they’re written on, so why are we wasting millions of taxpayers money on the survey?”
In trend terms, employment increased to 11,775,800 in September 2015 (up around 10,000) and the unemployment rate was unchanged at 6.2% for the third consecutive month.
The trend participation rate was unchanged at 65%. The ABS said that trend employment increased by 232,400 in the year to September 2015 while the civilian population aged 15 years and over increased by 286,400 over the same period – illustrating that the economy is not growing enough to soak up all the new entrants, but is at least holding up in the face of continuing weak economic growth
The AMP’s Chief Economist Dr Shane Oliver said in a comment yesterday that “it would be wrong to read too much into one month’s worth of data. However, unemployment is likely to trend up slowly as economic growth remains subdued around 2% year on year. Higher mortgage rates flowing through to owner occupiers and dampening spending power will only add to the risks of rising unemployment.”
"Hence the September jobs data do nothing to change my view that the RBA will need to ease official interest rates again to head off higher owner occupier mortgage rates (as the major banks seek to follow Westpac’s lead in seeking to recoup higher funding costs flowing from higher capital requirements). November’s Melbourne Cup Day RBA meeting is likely to see a cut, failing that then early next year.”
