Today is labour data day in Australia.
It’s a day when traders here and all around global markets get set to hit their buy or sell buttons for the Aussie dollar, bonds and interest rate futures and to a lesser extent the ASX, once the data is released.
Recently however the unusual volatility has rendered the interpretation the employment report provides on the economy useless, as witnessed last month when the market ignored the 121,000 rise as being – well – make believe.
It led the ABS to the unprecedented step yesterday of announcing that it is revising the last two releases of the original data, ignoring the seasonal factors it had used, revealing today’s figure will be the raw number estimated from the survey. The ABS also announced an investigation into the data survey.
From an economic and statistical standpoint this reaction from the ABS is as troubling as the data itself. If the ABS can’t figure out the seasonal factors on Australia’s already volatile but equally most important economic release each month and has decided to drop seasonality altogether then what does that tell us about any Australian economic data?
It’s a theme picked by the NAB’s head of research Peter Jolly who said, “whatever the ABS prints for today’s September labour force should be entirely ignored on the basis of complete unreliability.” He also quipped that it is wrong to characterise the employment report as a lottery because “at least a lottery has a prize”.
As it stands though the upshot is that the market is expecting a fairly strong employment release today. The NAB is looking for a rise of 30,000, the ANZ 35,000, Westpac 25,000 and the CBA’s economics team is looking for a monster 50,000 increase in jobs.
There will be a lot of money made and lost in the minutes after the release at 11.30 AEDT today – but the number will tell us nothing. It is a disgrace for an advanced economy like Australia to have its central statistical body in such a flummox and Treasurer Joe Hockey’s call for a user pays ABS is just ridiculous.
Nevertheless, we’ll have full coverage here at Business Insider at 11.30 AEDT.