Depending on where you are in the economy, the monthly update on jobs and wages from the Australian Bureau of Statistics on Thursday had bad and worse news, at least as far as the future direction of interest rates is concerned.
The data for the month to September 17 (using Australian tax Office payroll data) showed a 0.3% rise in payroll jobs, right on the average for the past six months or so.
That’s a rough guide to employment but not as comprehensive or detailed as we will get in a week’s time in the monthly labour force report from the ABS. it is also a rough guide to wage movements.
The data backs up the quarterly job vacancy data showing a lot of jobs empty (meaning the actual rise in payroll jobs should have been low, as the data confirms) and waiting to be filled and the tight monthly data at the moment in labour market growth.
At the same time wages rose 2.7% in the month – and that includes bonuses and other payments (which is slightly analogous to the basis for average weekly earnings are computed by the ABS each quarter).
So far as the Reserve Bank is concerned the continuing strength of the jobs market won’t be pleasing but the still weak wage growth will be – so bad news so far as interest rate rises are concerned (potentially at the November 1 monetary policy meeting of the central bank) and further confirmation that millions of employees continue to suffer a decline in real wages as rate rises starting pinching – especially new mortgagees.
Bjorn Jarvis, head of labour statistics at the ABS, said in Thursday’s release: “Payroll jobs have continued to grow slowly across 2022, with average monthly growth over the past six months of 0.3 per cent. This reflects the sustained tightness in labour market conditions across the country.
“The growth in the month to mid-September 2022 varies from previous years, due to differing labour market conditions at the time. In mid-September 2021, payroll jobs fell due to Delta-related lockdowns in some jurisdictions, and rose in mid-September 2020 reflecting the recovery from initial pandemic impacts.”
The ABS said that in the month to mid-September 2022, payroll jobs rose in 7 of 19 industries. The largest rises were in Education and training (up 2.0%), Retail trade (up 1.4%) and the Professional, scientific and technical services industries (up 1.1%). Together, these industries account for almost 90% of the growth in payroll jobs during this period.
The remaining 12 industries saw falls in payroll jobs over the month to mid-September 2022, with the largest in the Arts and recreation services (down 1.3%) and the Transport, postal and warehousing industries (down 1%).
“Payroll jobs rose in every state and territory in the month to mid-September 2022, with the largest rises in the Australian Capital Territory and Western Australia (up 0.7 and 0.6 per cent),” Mr Jarvis said.
“The Education and training industry accounted for more than a third of the payroll jobs increase over the month to mid-September across all states and territories, reflecting the seasonal high in payroll jobs ahead of the Spring school holidays.”
Wages paid rose 2.7% in the month to mid-September 2022.
“The seasonal increase in wages was largely driven by the payment of periodic bonuses in multiple industries around September each year,” the ABS said.
“As Single Touch Payroll data does not currently separate bonuses and other types of payment such as overtime from wages and salaries, it is not possible to identify underlying growth in core wages and salaries in these statistics.”
But with the Wage Price Index up 2.6% in the latest data (to the end of June), the wage data suggests none or little growth at all in core wages. The Index doesn’t include bonuses, overtime etc but measures wages in specific jobs.
