From Westpac:
Be cautious with this month’s release, there are a number of underlying issues
Total employment lifted 58.6k in October, more than double the top of the market estimate for a 25k rise. Westpac’s forecast was for +15k. Total employment has now grown 315k (or 2.7%yr) in the year to October, a significant acceleration from the 2.0%yr in September Revisions were minor this month.
The mix was also very robust with a 40k rise in full-time employment (167.1k or 2.1%yr) and an 18.6k rise in part-time employment (148k or an unbelievable 4.2%yr). With a small rise in participation (from 64.9% to 65.0%) the unemployment rate fell to 5.9% from 6.2%.
While a positive update on the labour market is welcomed, we are very cautious about taking this month’s number at face value. Firstly, the annual pace of employment growth of 2.7%yr look way to strong compared to our indicators of the labour market. Secondly, the original data suggest total employment rose 92.7k when normally it is a significant negative in October (you have to go back to 1979 to find a small positive for October).
It does appear the ABS is still having problems with the original data following changes to the supplementary surveys. As such, we are cautious about reading too much into today’s very strong update.
A full update with more details for follow soon.
