Well, who’s up for a few charts today?
Let’s take a look at the June 2015 Labour Force release in the usual three parts, teeing off with…
Part 1 – Employment to new high of 11.769 million
Another fine result this month, with last May’s result revised from a very strong +42,000 to +40,000, and a further estimated +7,300 jobs added in the month of June.
This was a positive result which takes total employment in Australia to a new highest level of 11,768,600.
Zooming in the chart below we can see that with the assistance of low interest rates the economy has added +224,500 jobs (growth of +1.9 per cent ) over the past year on a seasonally adjusted basis.
The raw unadjusted data revealed even stronger growth of more than +228,000 jobs added in the past year.
These are surprisingly big numbers, perhaps reflective of the fact that although mining employment is clearly contracting, the resources industry is only a relatively small employer when compared to Australia’s massive services sector.
Indeed, the eight months since October 2014 have seen a rollicking +205,300 jobs added, an annualised growth rate of an outlandish 2.7 per cent!
Perhaps the most positive aspect of this release was that full time employment accounted for the gains, increasing by +24,500 to a new high of 8,156,200, although as we shall see below, full time employment in South Australia is tanking badly.
Part 2 – Sydney leads 2015 employment growth
Since January of this year New South Wales has accounted for nearly two thirds of jobs growth in Australia, with the southern states continuing to tread water.
The cumulative employment growth chart below by state and year almost tells its own story – but just in case it doesn’t…the South Australian economy is in dire straits.
With a flailing manufacturing industry full time employment in South Australia has crashed from 547.400 in August 2008 to just 519,600 in June 2015.
The bulk of employment growth over the past year has been seen in New South Wales and Victoria.
The Detailed Labour Force data later in the month will reveal how regional Australia is struggling to create jobs in aggregate.
Part 3 – South Australia unemployment rips
The unemployment rate was reported at 6.0 per cent in June, with the May result being revised down to 5.9 per cent. The unemployment rate is now down from a peak of 6.3 per cent in this cycle.
Youth unemployment pulled back further to 13.3 per cent having touched a high of 14.4 per cent in November last year.
I’ve been warning on this blog for a very long time that with South Australia not creating any jobs at all for years now, with a moderately increasing population and a car assembly industry set to be shut down, this must eventually be reflected in a higher unemployment rate.
The unemployment rate in Elizabeth as at March 2015 was 32.6 per cent, in Davoren Park the unemployment rate rose to 20.2 per cent, and in Smithfield-Elizabeth North the rate of unemployment was 20.5 per cent.
There is worse to come yet as the car manufacturing winds up.
Not a popular viewpoint, I know, but take a look at the chart below which estimates that South Australia’s unemployment rate has now ripped higher to an alarming 8.2 per cent in June, the highest level level in 16 years.
As a point of comparison the next highest unemployment rate in Australia was to be found in Tasmania at 6.5 per cent.
Queensland’s headline unemployment rate declined from 6.3 per cent to 6.1 per cent in the month.
Naturally it is true that monthly unemployment rates are volatile and unreliable, so below I’ve smoothed them on a 6 month moving average basis.
New South Wales continues to remain very solid on the back of a thriving Sydney economy.
Unemployment rates in Queensland, Victoria and Tasmania have each trended down nicely since Q4 2014, suggesting that easier monetary policy has helped to drive a level jobs growth in the services sectors, at least in the first two of the aforementioned states.
On the other hand South Australia and Western Australia are now in a clear unemployment uptrend.
Overall, this was a strong release, although it seems that jobs growth may be too focused on Sydney.
Given the strong jobs report in May, that the survey held on to previous gains and even added more jobs was a pleasing result.
Weak capex reports have been a concern, but do they tell the full story?