The Australian Bureau of Statistics has released the August Labour Force data today and to say it was disappointing would be an understatement.
Markets were expecting 10,000 new jobs to be created.
Instead, there were 10,800 less jobs in August, and it was a reality check for investors, who had been optimistic this week after rallies offshore and the Coalition’s election win at the weekend.
The Aussie Dollar — which was higher just before the release — has fallen 0.7 of a cent to 0.9270.
The ASX liked the data initially but has since started to pull back as the balance between economic weakness and less chance of an RBA rate hike, which interest rate markets had started to factor in over the next 12 months, works its way through the market.
Interest rate markets in the short end of the curve really like it with the 90 day bill contract on the Sydney Futures exchange rising 7-10 points across the contracts out to 2015 (a rise implies lower rates).
The ABS said of the breakup:
Seasonally adjusted full-time employment fell in August 2013, down 2,600 persons to 8,128,800 persons while part-time employment fell by 8,200 persons to 3,508,300 persons. The decrease in total employment resulted from:
- a decrease in male full-time employment, down 15,600 persons
- a decrease in female part-time employment, down 13,300 persons
- an increase in female full-time employment, up 13,000 persons
- an increase in male part-time employment, up 5,100 persons.
Despite the decrease in total employment, seasonally adjusted aggregate hours worked increased 1.1 million hours in August 2013 to 1,650 million hours.
It’s this last point the ABS highlights that gives hope that more employment will filter into the economy over the months and year ahead.
An increase in hours worked means an increase in labour utilisation which if that gets tight leads to the need for more workers. You can see the relationship in the chart above which shows both total employment and hours worked since the beginning of 2007.
So these data aren’t great numbers on their own and a 10,800 loss is disappointing but there just might be some tentative signs in hours worked that even if job growth isn’t going to pick up right away at least job losses might begin to slow.
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