From Callam Pickering at Business Spectator:
Month after month, the market incorrectly assesses the labour market because they focus on the wrong data.
The Australian Bureau of Statistics makes it very clear that the trend data is more reliable than the seasonally-adjusted estimates.
Using the seasonally-adjusted data, the ABS is 95 per cent confident that employment growth was somewhere between a 39,000-person fall and a 76,000-person rise during March.
They are also 95 per cent confident that the unemployment rate was somewhere between 5.2 and 6 per cent. Wide confidence intervals are a common feature of seasonally-adjusted data, which is precisely why the ABS recommends a greater focus on trend estimates.
…the trend data is providing a very clear signal that the labour market has yet to pick up. On a trend basis, the unemployment rate was largely unchanged at 6 per cent in February and the participation rate remained at 64.7 per cent.
I wouldn’t go that far. There’s clearly been a turn in the labour market. It has stabilised and probably rebounded slightly. But the bounce is neither sharp nor likely to accelerate and will likely come under increasing pressure from mid year.
But at least our Callam is sane!
