Australia’s jobs report for October has just been released, and it’s smashed expectations.
Over the month employment jumped by 58,600, well above the median market forecast for an increase of 15,000. The increase was the largest since March 2012.
Full time employment jumped by 40,000, overshadowing a 18,600 increase in part time workers. The ABS note the increase was driven by gains in male full-time employment (up 33,500) and female part-time employment (up 24,000).
As a result of the stellar jobs increase, total employment rose to 11,838,200, the highest level on record.
From a year earlier employment jumped by 315,000, or 2.73%. It marked the fastest annual percentage increase since November 2010.
The unemployment rate fell to 5.9%, well below the 6.2% level expected. It now sits at the lowest level seen since April 2014. The decline came despite the participation rate ticking up 0.1% to 65.0%. The number of people unemployed decreased by 33,400 to 739,500.
Matching the sharp lift in employment, hours worked increased by 19.1 million hours, a rise of 1.2%, to 1.66 billion hours.
All of the key figures from the jobs report are found in the chart below.
Much like the national rate, there were some crazy movements in unemployment across the country.
In New South Wales unemployment fell 0.3% to 5.5% while for Victoria it tumbled 0.7% to 5.6%. Unemployment also fell in Queensland and South Australia but rose in Tasmania and Western Australia.
All the state and territory figures are shown in the table below.
Given the stellar jobs report, and the wild movements found within it, the question many are now grappling with now is whether they are believable. Yes, alternate labour market indicators have been strengthening recently but certainly not to the degree portrayed in the ABS report.
In a note released shortly after the data hit, Just Fabo of ANZ called it “startling strength.”
“While undoubtedly there is some noise in today’s data, underlying jobs growth has been strong for a run of months. Non-ABS labour market indicators have been solid/strong for some time, so today’s numbers might indicate some catch-up to those,” he wrote.
Despite the extreme volatility, and doubts about the accuracy of the data, Fabo suggests it will likely have implications for domestic monetary policy.
“When we called for 50bps of cash rate cuts in H1 2016 we flagged that near-term labour market conditions would likely remain pretty good. Perhaps the labour market is even better currently than we thought. If so, achieving a cash rate cut by February looks less likely at this stage.”
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