Yesterday’s release of Australia’s October jobs report was a cracker.
The report showed that employment grew an incredible 58,600 (seasonally adjusted) in October with 40,000 of those jobs coming in the full time category. That’s taken the total number of employed people in Australia to a new all-time high of 11,838,200.
That is a beautiful set of numbers.
But one thing that seems to have slipped under the radar in the discussion of the credibility of Australia’s monthly labour force survey is something important just happened to the unemployment rate.
That is, the surge in employment saw the unemployment rate drop 0.3% to 5.9%.
Drum rolls please.
That means that the uptrend in employment that started just as the GFC kicked off in 2008 has now tentatively broken.
Now, I say tentatively because this data series is volatile and prone to revision. So there is every chance that next month we find out that there wasn’t actually 58,600 jobs created this month nor that the unemployment rate was actually 5.9%.
But the key here is that the Australian labour market continues to be much stronger than many believe. So strong that even with all the concerns about the volatility of the data, everyone is changing their rate cut calls.
Goldman Sachs, UBS, and AMP all changed their call for an RBA rate cut after the data while the ANZ looks like they are slowly walking away from the call.
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