Employment rose by 13,900 in November after a revised gain of 10,100 jobs in October (previously +10,700). Economists had expected a flat result.
- In November, full-time jobs fell by 4,200 after rising by 17,600 in October. Part-time jobs rose by 18,100 after falling by 7,400 in October. Full-time jobs have only fallen once in the past five months.
- The unemployment rate decreased from 5.4 per cent to 5.2 per cent in November. The participation rate fell from 65.2 per cent to 65.1 per cent – near six year lows.
- The number of hours worked rose by 0.1 per cent in November after falling by 0.3 per cent in October and now stands 0.3 per cent higher than a year ago.
- Unemployment across states and territories: NSW 5.1 per cent (5.2 per cent in October); Victoria 5.5 per cent (5.4 per cent); Queensland 6.0 per cent (6.1 per cent); South Australia 5.3 per cent (5.6 per cent); Western Australia 4.1 per cent (4.6 per cent); Tasmania 6.7 per cent (6.7 per cent); Northern Territory 3.8 per cent (3.9 per cent); ACT 4.1 per cent (4.0 per cent).
What does it all mean?
- The doomsters have got it wrong – again. More jobs created, more hours worked and fewer people unemployed. Overall the Australian economy is holding up well despite a very uncertain global environment. While there are a number of high profile company failures and job losses, beneath the surface small and medium-sized business are still keen to put on more staff. The anecdotal evidence is that it is hard to attract and retain staff and today’s jobs figures back up these observations.
- It was certainly encouraging to see the lift in overall employment. In fact total employment has increased for three consecutive months, hours worked is on the rise and the slide in the unemployment rate is certainly a confidence booster for the economy. However it is not all smooth sailing. The cynics would look at the fall in full-time jobs coupled with the participation rate – which is holding at near six-year lows – and conclude something more concerning.
- The truth is somewhere in the middle. The labour market is healthy without shooting the lights out. And while it is encouraging that employment grew, more forward looking indicators like job advertisements have suggested that further labour market gains may be more circumspect. In fact internet and newspaper job advertisements have fallen for eight consecutive months, suggesting job growth is likely to flat-line in coming months.
It is clear that while employers aren’t keen to hire unless they have to, however they aren’t firing existing staff either. While jobs are being lost in some industries, clearly they are being created in other industries. Overall it does seem like a fair proportion of Aussie businesses are holding onto existing staff and waiting for an improvement in economic conditions. - Over the past year the missing ingredient in the domestic economy has been confidence, however there are anecdotal signs that there is an improvement in confidence. Rate cuts, a pickup in housing activity, rising share markets should provide some level of encouragement to policymakers, households and businesses.
In a perverse way the unemployment rate fell because more people have given up the search for work. Over the past couple of months a smaller proportion of people are in the workforce – people in jobs or are looking for work – with the participation rate holding just shy of the 6-year lows. - The Reserve Bank won’t look too deeply into today’s data as figures in coming months will be more telling. But the data is consistent with the Reserve Bank retiring to the sidelines and assess more information. Chances of further rate cuts have receded modestly.
What do the figures show?
- Employment rose by 13,900 in November after a revised gain of 10,100 jobs in October (previously +10,700). Economists had expected a flat result. In November, full-time jobs fell by 4,200 after rising by 17,600 in October. Part-time jobs rose by 18,100 after falling by 7,400 in October. Full-time jobs have only fallen once in the past five months.
- The annual employment growth rate rose from 0.9 per cent to 1.1 per cent in November. The working age population rose by 24,500 in November after lifting by 24,400 in October. The working age population grew by 1.69 per cent over the past year.
- The unemployment rate decreased from 5.4 per cent to 5.2 per cent in November. The participation rate fell from 65.2 per cent to 65.1 per cent – near six year lows. The number of hours worked rose by 0.1 per cent in November after falling by 0.3 per cent in October and now stands 0.3 per cent higher than a year ago.
- Unemployment across states and territories: NSW 5.1 per cent (5.2 per cent in October); Victoria 5.5 per cent (5.4 per cent); Queensland 6.0 per cent (6.1 per cent); South Australia 5.3 per cent (5.6 per cent); Western Australia 4.1 per cent (4.6 per cent); Tasmania 6.7 per cent (6.7 per cent); Northern Territory 3.8 per cent (3.9 per cent); ACT 4.1 per cent (4.0 per cent).
- Queensland recorded the biggest job gains in November (+27,700), followed by Western Australia (+5,400), Northern Territory (+300 in trend terms). Jobs fell most in NSW (-18,000), followed by Victoria (-13,800), Tasmania (-3,200), and South Australia (-1,300). Employment was flat in the ACT in trend terms.
What is the importance of the economic data?
- The Labour Force estimates are derived from a monthly survey conducted by the Bureau of Statistics. The population survey is based on a multi-stage area sample of private dwellings (currently about 22,800 houses, flats, etc.) and a sample of non-private dwellings (hotels, motels, etc.). The survey covers about 0.24 per cent of the population of Australia and includes all people over 15 years of age, except defence personnel.
- If more people are employed, then there is greater spending power in the economy. But at the same time companies may adjust the work hours of employees. If employees work less hours, and therefore get paid less, then spending power in the economy is reduced.
What are the implications for interest rates and investors?
The jobs data will be closely watched by the Reserve Bank in coming months. An array of indicators has suggested that activity levels have bottomed out and showing modest signs of improving. And while policymakers will want to get a better gauge of the impact from the recent stimulatory efforts further rate cuts still remain on the cards.