It was the fastest pace of jobs growth since March 2012, but also the highest unemployment rate for 12 years – two readings from the November jobs data which confounded some of those looking for rate cuts and sent the Aussie dollar higher, as well as helping halt a worrying sell off on the ASX yesterday morning.
The market ended down half a per cent when earlier in the day it was down 1% and looking to go lower as world oil prices sold off.
The Australian Bureau of Statistics November jobs report revealed a surprisingly solid rise in new jobs in the month of more than 42,000, seasonally adjusted.
The news pushed the dollar higher and puts the weight on the rate cut enthusiasts in the markets and among forecasters. The 42,000 new jobs reported by the ABS was considerably more than the 15,000 suggested by the market.
November’s sold jobs growth followed the downwardly revised rise of 13,700 jobs in October, from the originally reported 24,100, a change which reflects the Bureau’s tinkering with its new seasonal adjustment methods, and new information.
Of course that recent problem with the accuracy of the figures will make analysts cautious about veracity of these estimates, especially those concerned about the strength of the economy.
The unemployment rate edged up less than 0.1 percentage points to 6.3%. That’s the highest since March 2002, which grabbed quite a few headlines.
This could be seen (as the rise in the participation rate hints at) that more people have returned to looking for work. But the biggest rise in new jobs for 32 months was also headline material.
Local jobs market still sluggish
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If the ABS figures are anywhere near accurate, then it’s clear employment isn’t sliding – despite weakening business conditions and confidence and weak consumer confidence. But there were a couple of points about the data which confuse the picture.
But it’s clear the jobs market is still sluggish, with little dynamic growth. But it is not shedding jobs, despite continuing employment losses from the resources sector as companies cut costs or end contracts.
The ABS said the seasonally adjusted labour force participation rate increased 0.1 percentage points to 64.7% in November 2014, which is a small positive from the report. Offsetting that was an 0.3% fall in the seasonally adjusted number of hours worked to 1,610.6 million hours, which seems a little at odds with the rise in employment.
The ABS reported the number of people employed increased by 42,700 to 11,637 million in November 2014 (seasonally adjusted). The increase in employment was driven by increased part-time employment for females (up 36,400) and full-time employment for males (up 23,300) offset by a fall in female full-time employment (down 21,400). Total full-time employment increased, up 1,800.
The ABS said the seasonally adjusted number of people unemployed rose 4,700 to 777,700 in November.
The ABS said the "seasonally adjusted underemployment rate was 8.6 per cent in November 2014, an increase of 0.3 percentage points from August 2014. Combined with the unemployment rate of 6.3 per cent, the latest seasonally adjusted estimate of total labour force underutilisation was 15.0 per cent in November 2014, an increase of 0.6 percentage points from August 2014".
The news from the states was mixed. Unemployment in NSW rose from 5.8% in October, seasonally adjusted, to 6% last month, remained steady at 6.8% in Victoria, fell in Queensland from 7.1% to 6.9%, eased in South Australia to 6.6% from 6.7%, rose slightly in Western Australia to 5.2% from 5.1% and was steady in Tasmania at 6.9%.
