Australian Jobs Numbers Are In The Goldilocks Zone

The Australian Bureau of Statistics has just released the labour force data for September which showed the number of people employed in Australia rose by 9100. The unemployment rate fell to 5.6%.

Full-time unemployment rose by 5100 while part time employment rose by 4000.

On the face of it this is a disappointing number, in the context of recent falls and the market’s expectation of a rise of 15,000. But employment is a lagging indicator and while the business surveys from the AiG and NAB have shown improvement, there is continuing pressure on the employment sector – at least until business expectations about improved conditions turn into actual improved conditions

This could take up to 6 months.

So there are real reasons to be hopeful that this is the tentative start to a recovery in employment – certainly the ANZ thinks so as they suggested last week on the back of improving Capacity Utilisation.

There is very interesting underlying data however: NSW lost 22,000 jobs while WA and Queensland were up 16,500 and 12,400 respectively. This is potentially very positive for employment because the business surveys show finance – which NSW is very strong in – as one of the stronger industries in the country and thus likely to turn around soon.

But the really good news is that the total number of employed looks to have started to turn up once again and while unemployed has turned down.

There is enough in this data today to be confusing for both bulls and bears. This might explain why the Aussie dollar since the release has trade a 0.9423-0.9473 range which is roughly the same as the hole range yesterday but for no real gain with the Aussie back at 0.9450.

Times of transition are volatile economically and for markets – but in this data are the seeds of a recovery in employment.

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