Australia's employment report misses again

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Australian labour market conditions continued to soften in October.

Another concerning outcome following news earlier this week that Australian wages grew at the slowest pace on record in the year to September.

According to the Australian Bureau of Statistics, employment rose by 9,800 in October in seasonally adjusted terms, missing expectations for an increase of 20,000.

September’s decline, previously reported at 9,800, was revised significantly lower to a drop of 29,000.

Full time employment soared by 41,500, almost completely reversing the decline reported in September. The recovery, just like the plunge seen previously, is more likely than not the result of a statistical quirk in the data.

Male full-time employment increased by 27,500, near double the 14,000 lift for females.

Part-time employment plunged by 31,700. Both male and female part-time employment fell, logging declines of 12,800 and 19,000 respectively.

Fitting with the shift from part-time to full-time employment reported in October, total hours worked rose by 14.3 million hours to 1,674.8 million hours.

As a result of the movements in full and part-time employment in October, total employment increased to 11.9389 million, just below the record high of 11.9645 million seen in July this year.

It’s increased by 102,200 over the past year, or 0.86%. In percentage terms, that’s the slowest in two years.

Underlining the heightened levels of slack within Australia’s labour market right now, all of the employment growth over that period has been in part-time positions.

Part-time employment has increased by 136,900, or 3.72%. At the other end of the spectrum, full-time employment fell by 34,700, or 0.43%.

The unemployment rate came in at 5.6%, unchanged from level reported in September. Without rounding, it fell to 5.58%, the lowest level since February 2013.

Male unemployment fell to 5.52%, also the lowest level seen February 2013. Female unemployment stood at 5.64%, almost unchanged from the levels of a month earlier.

Labour force participation held steady at 64.4%, courtesy of a downward revision to the September figure which was previously reported at 64.5%.

It now sits at the lowest level in over a decade.

The male participation rate rose to 70.2%, up from the record-low level of 70.1% in September, while that for females ticked up to 58.8%, the highest since June last year.

The total number of unemployed persons fell by 2,000 to 705,100, leaving it down 5.2% on the levels of a year earlier.

It now stands at the lowest level since November 2013, thanks largely to the reduction in labour force participation rather than employment growth.

New South Wales recorded the lowest unemployment rate of all the states at 4.9%. It was followed by Victoria and Queensland at 5.7% and 5.8% respectively.

Western Australia, at 6.5%, displaced Tasmania as the state with the highest unemployment rate in October.

Market reaction to the data has been muted: partially due to the strength in full time hiring and hours worked and partially because investors are now sceptical about the veracity of the seasonally adjusted figures.

Forgiving the wild monthly swings, the trend over the past 12 months is that labour market conditions are softening.

Employment growth is decelerating, thanks to a decline in full time workers, while labour market participation and the employment-to-population ratio continues to trend lower.

Given the RBA’s focus on underemployment in the labour market at present, along with the weak wage report released earlier this week, there’s likely to be plenty of interest on that figure when it is released in the November jobs report in mid-December.

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