The ABS has just released the employment report for May which showed a decrease on total jobs of 4,800 during the month. The break up of full time part time was and increase of 22,200 while part-time fell 27,000 in May.
This is a big miss from the market expectation of a rise of 10,000 and well outside the 5,000-25,000 range that the Bloomberg survey of 27 economics estimated. But the unemployment rate remained steady at 5.8% with the participation rate falling 0.1% to 64.6%.
The Aussie dollar initially fell 35 points against the US dollar but has recovered as the market digested the numbers beyond the headline figures. Here’s what you should know:
Hours worked in the economy were up
The ABS reported that even though employment fell that “monthly seasonally adjusted aggregate hours worked series increased in May 2014, up 26.5 million hours (1.7%) to 1,604.5 million hours.”
This implies that a large part of the change in the part-time/full-time nexus was all about a transition over the ABS 35-hour demarcation between full and part time employment for this series.
The total number of employed Australians is only 4,800 off the all-time high
Context is everything and while people like to focus on a falling worker-to-population ratio, it’s better to focus on total Australians employed.
To this end April was the all-time high so this is a slight pull back from that but still above every other month in this series except April 2014.
But there are also a lot of Australians looking for work
The ABS said underemployment was 7.6% last month – that’s people who would like to work more hours – and total people looking for work (full and part time) sits at 717,000. This is below February’s 741,000 but shows that many Australians are still looking for work.
All up this is a slightly disappointing release but one needs to be viewed in context of the economic uncertainty around the budget that was building in April and became reality in May. So this is an indication that employment growth might be stalling a little and is an additional headwind for an economy likely to be buffeted by the crash in consumer confidence.
But it is too soon to tell either way and there are still more Australians employed than almost any time in history.