Another weak labour force report sees Australia’s unemployment rate up to 6%, a fact which breathed some life and excitement into the bearish circles.
I’ll never understand how people can see job losses as something to get excited about.
I just can’t help that, I’m a natural born optimist who prefers to try to see the best in people and look for positivity in situations whenever and wherever I can.
I don’t pay much heed to monthly employment data. The samples are too small and the non-response rates too high for it to carry too much meaning.
However, looking at the number of employed persons since January 2013 shows a disappointingly flat line.
Given that Australia’s population is growing, this equates to a soft labour market, and the net result is that the unemployment rate has risen to 6%.
Although not yet high, this is the highest rate of unemployment we’ve seen in a decade.
Normally I put the unemployment rates and jobs growth figures by state into charts but I really can’t be bothered today, since there isn’t a lot new of note to point out.
On the face of it, South Australia looked a tad better with 6.6% unemployment but the state is still shedding jobs on a year-on-year basis and given the car industry news, the outlook looks pretty average.
I keep reading articles about a forthcoming property boom, but for mine, I don’t see it. Adelaide has continued to be the worst performer of the major capital cities.
Victoria (6.4% unemployment) seemingly faces a few labour market headwinds too. Things in New South Wales (5.8%) look solid enough to date.
But by and large, well, things just all look a bit flat.
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What does this mean?
Rising unemployment should put the inflation fears back in their box, and there is no way we’ll see interest rate rises at least until we see a month or three of much stronger employment data than this.
Interestingly, the dollar fell, but cash rate futures markets didn’t really change a lot, suggesting that the market doesn’t see much new here.
Perhaps we’ll see better employment prints ahead following on from other decent economic data.
Those calling for hikes will be forced to push out their hike forecasts until the second half of 2014 at the earliest.
Last week Steve Keen was even calling for a cash rate of 3.50% (it’s currently at 2.50%) by June (?!).
You have to chuckle, and can only conclude that Keen has taken to making these predictions to gee people up or get a rise out of them – or perhaps a headline – since there is more chance of Elvis stopping by Martin Place to chair the next Board Meeting than the RBA electing to hike rates for the next four months in a row. (uh-huh-huh).
I strongly suspect he was just stirring the pot a little.