The Austalian Bureau of Statistics just released one of the more remarkable increases in employment we have seen in many years. So remarkable that it is probably not true. But the data is the data and the ABS says that employment in August grew 121,000.
In an economy the size of Australia with around 11.7 million people working in the the economy at the moment that is a huge one-month increase.
Indeed David Scutt put some context around the size of this spike in employment in a tweet.
There is a bit of “sticker shock” on this data. Coming a month after the rogue and unexpected spike in the unemployment rate to 6.4% questions are being asked about the reliability of the data. Equally questions are being asked about why there is suddenly so much noise in the most important and closely-watched monthly economic release from the ABS.
The key here is what impact this will have on consumers – not those of us in the media and financial markets.
So leave aside the big spike in part-time employment which many see as an aberration. That 14,300 full-time jobs were created in August, in seasonally-adjusted terms, coupled with the fact that there were already more Australians working before this data than at any time in the country’s history, and the picture is still net positive.
More Australians working means more households earning income – this is the antidote to the weak consumer sentiment we saw in the Westpac data released yesterday.
But trying to square the circle of how consumer sentiment could dip at the same time that the ABS estimates 121,000 jobs were created is not as difficult as it might seem.
To do this we look at hours worked in the economy.
Surprisingly with the addition of 121,000 workers, the seasonally-adjusted estimate of hours worked fell.
Yes you read that right, it fell. Marginally, but lower nonetheless.
This tells us that concerns about the accuracy of the data might be well founded.
But in the end the most important thing for consumers are the headline and with a fall in the unemployment rate to 6.1% they should fell a little better in the month ahead.
That’s good news for the economy.