The Australian economy added just 1,100 jobs in October, with the unemployment rate at 5.7% as expected.
But the big surprise is the fall in full-time employed: 27,900 and the Aussie dollar is down almost half a US cent on the news and still falling.
The data was disappointing to be sure a fall of 27,900 in full time employment is a big drop. The markets initial reaction is the right one in the context of the recent Aussie dollar rally and the move higher in 90 day bill, 3 year and 10 year bonds reflects the notion that the recent strong data may be masking a still weak underlying economy.
But there are a couple of signs in this data that suggest the recent improvement in the domestic economic data flow might have some genuine legs.
Take for example the fall of 27,900 full time employed jobs. It was more than offset by an increase in part time employment of 28,900.
This is important because part time workers are not always what they seem. Part time probably brings to mind workers putting in 10, 15 or 20 hours a week. But the ABS has a very high hurdle for part time work at 35 hours! Which means the market might have over reacted to this little nuance.
Further evidence that the data masked an improvement in economic conditions was that total hours worked in the economy increased by 6.5 million hours even though all those full time jobs were lost. The chart above shows how “part time” hours worked leapt and even full time hours increased.
Employment is a lagging indicator and a weaker than expected headline outcome today reflects both capacity in the employed labour force and a still cautious hiring sector. But as hours worked rise so this capacity gets eaten up and eventually business will take on more workers.
Disappointing data on the face of it but some reason for underlying hope.