This week’s strong employment figures suggest interest rates won’t move this year
Lets look at this in 3 parts:
Part 1 – Employment rips
A dominant jobs report with total employment more than doubling market expectations in leaping by +58,600 in October, with a pleasing smash of +40,000 in full-time employment.Sample rotation will doubtless account for some of the gains, not for the first time.
Reported total employment has increased by a mighty +315,000 on a seasonally adjusted basis over the past year to a new high of 11,838,200, the strongest annual gain in 7.5 years.
Of course, it’s easy to make silly extrapolations from one month of data – this is a survey, after all, and not the most comprehensive one at that – and the growth in total employment growth of +2.73 per cent is so far ahead of the rate of population growth as to be literally incredible, but even the trend employment growth of +260,500 or +2.3 per cent represents a remarkably high figure.
Part 2 – State versus state
Over the past three months New South Wales (+29,900) and Queensland (+28,700) have recorded strong growth in total employment.
Over the past year the growth an overwhelming 93 per cent of the growth in total employment been accounted for by New South Wales (+137,100), Victoria (+87,800) and Queensland (+66,600), with close to further 5 per cent of the employment growth accounted for by Western Australia (+14,400).
Recent data for Brisbane has appeared to be particularly robust.
Part 3 – Unemployment dives
The seasonally adjusted unemployment rate dived from 6.2 per cent to just 5.9 per cent, while trend unemployment is now recorded as 6.1 per cent.
At the state level the trend unemployment rate continues to rise in Western Australia (6.4 per cent), but has generally declined elsewhere, while the position in South Australia (7.7 per cent) is considerably “less worse” than was reported in September.
The unemployment outlook has improved in New South Wales (5.7 per cent), Victoria (6 per cent), Queensland (6.3 per cent), and Tasmania (6.2 per cent).
Youth unemployment has declined sharply from 14.5 per cent last November to 12.2 per cent this month.
Lovely to see!
Interest rates now certainly on hold until 2016.