Australia’s August jobs report will be released later today.
After a surprise fall in July, economists expect employment will rebound modestly today, fitting with the signals provided by most leading labour market indicators.
Such an outcome would be music to the ears of policymakers at the Reserve Bank of Australia (RBA) whose forecasts for economic growth, unemployment, wage pressures and inflation are premised on a continued improvement in labour market conditions.
However, Australia’s jobs report is notoriously volatile, especially the seasonally adjusted figures, meaning not everyone shares the view that such a rosy outcome will arrive today.
Is another shock result on the way? We’ll find out at 11.30am AEST.
Here’s the state of play.
- In July, employment fell by 3,900 in seasonally adjusted terms, missing forecasts for an increase of 15,000. It was the first monthly decline since February.
- Full-time employment rose by 19,300 while part-time employment fell by 23,200.
- June’s increase in employment, initially reported at 50,900, was revised up to show a gain of 58,200.
- Total hours worked rose by four million hours, or 0.2%, to 1.7496 billion hours.
- Over the year, full-time employment increased by 194,700, faster than part-time employment which rose by 105,600.
- Despite the fall in employment in July, the unemployment rate slipped to 5.3% in seasonally adjusted terms, leaving it at the lowest level since 2012.
- The fall was explained by the labour force participation rate — measuring the percentage of working age Australians either in employment or actively seeking work — dipping 0.2 percentage points to 65.5%.
- The size of the labour force fell faster than employment, seeing total unemployment dip by 5,700 to 706,000.
- Today, economists expect employment growth to rebound modestly in August.
- Of the 25 polled by Bloomberg, the median forecast looks for an increase in employment of 18,000, enough to keep unemployment steady at 5.3% given participation is expected to remain at 65.5%.
- Individual employment forecast range from a fall of 10,000 to an increase of 35,000.
- TD Securities, the only forecaster to predict a decline, says seasonality, rather than a deterioration in labour market conditions, will be the main factor behind the weakness.
- Providing additional information on the level of slack that exists within the labour market, the ABS will also release quarterly underemployment and underutilisation figures in today’s report.
- Underemployment reflects people who are employed but who would like to work more hours. Combined with unemployed workers, that is used to calculate Australia’s underutilisation rate.
- In May, the labour force underemployment rate increased by 0.1 percentage points to 8.5% in seasonally adjusted terms, leaving the underutilisation rate steady at 13.9%.
- Many believe the underutilisation rate has a far better inverse relationship to wage pressures than the unemployment rate, ensuring that it will receive plenty of attention.
- Along with the unemployment rate, it will likely drive market movements in the immediate aftermath of the report’s release.
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