SCOREBOARD: Hatchet job

The data:

– Australian employment surprised massively on the downside, falling 29,000 when an increase of about 10,000 was expected.
– All of the fall was in part-time jobs, which fell 53,000 after a 32,000 increase, while full-time jobs rose 24,000 after a 39,000 decrease.
– Falls were broad-based across states although the biggest fall was in New South Wales, where 20,000 jobs were lost and the unemployment rate spiked to 5.6 per cent from 5.2 per cent. Otherwise there were small falls of about 2000 to 5000 in each state, while unemployment rates were either unchanged (South Australia and Western Australia at 5.3 per cent and 4.3 per cent) or down a bit (0.3 percentage points to 5.2 per cent in Victoria and 5.4 per cent in Queensland), driven by big drops in participation.
– Nationally, the unemployment rate was steady at 5.2 per cent from a revised 5.2 per cent (it was 5.3 per cent last month). The participation rate fell to 65.2 per cent from 65.5 per cent.

What the data means:

This is a fairly bad number, softened by the jump in full-time jobs, which on average have risen by just under 4000 over the last three months and by 15,000 over the year. Total employment has fallen on average by 7000 per month over the last few months but is largely unchanged over the year. I think this is the best way to characterise the labour market then. Jobs aren't being created but neither are we seeing broad-based job shedding. That may come, and there has certainly been a remarkable amount of press on the issue. Nevertheless, the fact that private demand was at its strongest in about four years in the September quarter, driven in part by robust consumer spending, would argue against that. Similarly, hours worked spiked in the month, which tells us that the work is there to be done, but that employers are still being very cautious about hiring – instead opting to lift the hours of existing employees.