The ABS released its Labour Force figures today, and it was an unambiguously positive result.
I discussed the possibility of the total employment figure popping higher (and why it might happen) here. And in the event, so it did.
Let’s take a look in three short parts.
Part 1 – Employment up
Total employment increased by 37,700 to 11,720,300, a strong result and considerably better than forecast.
Following a revision total employment increased by a super-strong +79,600 over the past two months on a seasonally adjusted basis.
Zooming in the chart a little to a 5 year time frame shows that the past five months has seen the economy add an amazingly strong +155,300 jobs – at least according to the seasonally adjusted data – the best such result in four years.
The trend figures suggest a still strong +111,700.
The ABS produced some impressively mangled commentary on methodology changes which were about as clear as a misty morn on the River Thames (and for reasons I couldn’t be fussed to fathom altered this data almost all the way back to when I was born).
Anyway, one of the major positives from this release was that full-time employment accounted for most of the increase at +31,500.
Other positive news included a rise in the participation rate from 64.7 to 64.8 per cent, and a 0.3 per cent rise in hours worked (now +1.7 per cent year-on-year and sitting at record highs).
Part 2 – State versus state
The big gainers for total employment this month were New South Wales (+26,000) and Victoria (+10,000), while over the past year the jobs growth leaders perform a tidy switcheroo with Victoria (+100,000) and New South Wales (+43,000) leading the charge.
As I will highlight in the Detailed Labour Force figures later in the month, Brisbane has also actually been adding jobs at an above-trend pace to join Sydney and Melbourne as a creator of jobs.
However, parts of regional Queensland are experiencing desperate economic conditions as documented here previously, which naturally impacts the state level figures adversely.
Looking at cumulative employment growth over the past five years shows how the southern states have contributed very close to “nowt” on a net basis, with the four most populous states accounting for almost all of the net increase in jobs.
Part 3 – Unemployment
A strong five months of data has brought the unemployment rate back down to 6.1 per cent on a seasonally adjusted basis, which is heartening to see.
The state level unemployment rates continue to jump around like a kangaroo on blue Smarties (or other brand of confectionery product containing e-numbers), but for completeness I have charted the results from the past quarter below.
New South Wales is the economic powerhouse (6.0 per cent unemployment) but the state unemployment rates have generally converged of late, with Tasmania’s labour market taking out the “most improved” award.
Smoothing the state unemployment rate numbers on a 4mMA average basis gives a somewhat clearer picture. Western Australia’s unemployment rate is still trending up, but seems to have arrested its deterioriation for now.
A strong set of numbers which suggest that low interest rates are creating jobs in other sectors to more than offset the job losses seen in mining and manufacturing, with the bulk of gains over the past year being seen in the four largest capitals.
As I will consider in the detailed labour market figures later in the month, sectors which have benefited include residential property construction, professional, scientific & technical services, IT & telecoms, accommodation & food services, transport, postal & warehousing, and arts & recreational.
Expectations of an interest rate cut have moderated significantly, although a cut is still priced as “more likely than not” at around a 57 per cent shot.
Wednesday’s inflation data is expected to print on the soft side and this is likely to be another key input into the May decision along with an apparent plateau in lending to property investors, albeit at a still elevated $12 billion of lending finance per month.