The market is expecting an increase in Australian employment – that’s new jobs in the economy – for the month of September to total 15,000 when the data is released at 11.30am.
The unemployment rate is expected to be unchanged at 5.8%.
But David Scutt reckons there is a better than average chance that the number might actually surprise by printing a bigger increase in employment. In his morning note to clients, Scutt said:
Given that there was no sharp increase in employment in August, something that usually occurs in the month before a federal election, it wouldn’t surprise to see total employment exceed expectations in September driven by gains in part-time workers.
It’s an interesting theory, so Business Insider asked Scutt about this phenomenon and he provided the following chart.
He told Business Insider:
This was the one that surprised me last month. As you can see, it’s a consistent trend that employment rises in the month before an election. Either the labour market is far worse than what we think or we’ll get ‘payback’ in September.
Indeed he added that Australian employment has fallen in the past two months which has only happened twice in the past 5 years. Australia hasn’t lost jobs in 3 consecutive months since 2000 … bearish if it does occur.
Employment is a notoriously lagging indicator and the recent AiG and NAB survey show that it is still lagging the huge pick-up in business sentiment and expectations.
A strong number today would tell us the economy is truly gaining momentum.
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