Employment strong

JANUARY KEY FIGURES

Dec 2011
Jan 2012
Dec 11 to Jan 12
Jan 11 to Jan 12

Trend
Employed persons (‘000)
11 446.8
11 448.5
1.7
0.2
%
Unemployed persons (‘000)
627.5
623.7
-3.8
3.3
%
Unemployment rate (%)
5.2
5.2
0.0
pts
0.1
pts
Participation rate (%)
65.3
65.3
-0.1
pts
-0.5
pts
Seasonally Adjusted
Employed persons (‘000)
11 417.5
11 463.9
46.3
0.3
%
Unemployed persons (‘000)
629.5
614.2
-15.3
1.0
%
Unemployment rate (%)
5.2
5.1
-0.1
pts
0.0
pts
Participation rate (%)
65.2
65.3
0.1
pts
-0.6
pts

SEASONALLY ADJUSTED ESTIMATES (MONTHLY CHANGE)

  • Employment increased 46,300 (0.4%) to 11,463,900. Full-time employment increased 12,300 persons to 8,063,100 and part-time employment increased 34,000 persons to 3,400,800.
  • Unemployment decreased 15,300 (2.4%) to 614,200. The number of persons looking for part-time work decreased 3,000 to 175,200 and the number of persons looking for full-time work decreased 12,300 to 439,000.
  • The unemployment rate decreased 0.1 pts to 5.1%. The male unemployment rate decreased 0.1 pts to 4.9% and the female unemployment rate decreased 0.2 pts to 5.3%.
  • The participation rate increased 0.1 pts to 65.3%.
  • Aggregate monthly hours worked decreased 23.1 million hours to 1,593.9 million hours.

Egg meet face! The RBA is looking good on these numbers. Very strong offset to December’s weakness. That’s why it’s no picnic trading labour data. Much more to come…

Comments

  1. One fly in the ointment:

    “Aggregate monthly hours worked decreased 23.1 million hours to 1,593.9 million hours.”

    • Hours worked per month per worker has fallen for the past 5 months and is close to its lowest levels for over 10 years. Yes, employment levels may be better than expected, but household incomes have been under sustained pressure for a while now. It won’t push households over the edge as it is more akin to the proverbial “death of athousand cuts”, but it does push households to reduce discretionary expenditure and save more.

      • I was going to say seasonal adjustment might be necessary but 5 months makes it a trend… curious then, it’s not like the GFC when companies held on to workers but hours dropped…

      • Five months could still be a seasonal effect over a one year or even multi-year period. But the employment and hours worked data do display a decline since around 2003. Combine that with recent retail sales experience (poor) and increased savings (defensive), and it is arguable that we are seeing some form of slow down take hold in the consumer side of the economy. At present, I see “choppy” economic seas ahead with the prognosos pretty much dependent on whether or not the US (and China?) are on sustainable growth paths.

    • Yes definitely excellent news.

      Allowing for the declining hours worked and that things may get worse, the result is excellent and we should cross our fingers that it continues!

      It means that the RBA can continue to pursue a rational interest policy – that is one which is likely to result in a gradual reduction in the private debt mountain – without too much hysteria from the ponzi debt related industries (housing finance).

      If we manage to defuse the debt mountain time bomb that is giving everyone heartburn whilst maintaining reasonable employment levels we will yet again be the ‘lucky’ country.

      Though the country with 9 lives may be more appropriate.

      Fingers crossed.

      • We would be the even “Luckier Country” as Lucky we already are – the resources boom having staved off a rapid descent to Ireland like conditions.

        But I agree, hope we just continue muddling through. As of 16 February 2012, we going OK. Month at a time!

      • Fair point about ‘luckier’ and the importance of mining resources in helping us stumble through the hang-over of the debt boom and our dependence in the recent past on foreigners choosing to save more than they consume.

        More domestically generated savings (and not just in the ticket clipping machine called compulsory super), would allow us to invest a more significant amount in our resource projects and importantly those in other countries.

        That would be sweet.

  2. unbeleivable! shows you what i know about UE..nothing. closing AUD short and sticking to long stocks.

    whats the RBA going to do now though? They cant cut on an employment gain but as per Ian Narevs comment in todays SMH they are losing money on the recent mortages they have been writing. so banks are going to continue to hike. crazy times, ive never seen so much conflicting data.

    oh well, buy the dips.

    • “unbeleivable! shows you what i know about UE..nothing. closing AUD short and sticking to long stocks.”

      Agreed – this result is very confusing for me as well.

      • Don’t forget the RBA itself has confessed its current confusion, Structural adjustment is not easy to read. If anything their caution here has paid off.

        The big drop and downward trend in the hours worked says labour market loosening is happening but perhaps firms are still in more of a labour hoarding mode than I thought, preferring to cut hours not people. Maybe we’ve adopted a permanent informal Kurtzarbeit system, which is no bad thing.

        Having said that, the number of layoffs in the last few weeks suggest more weakness is coming but at this stage doesn’t appear as disorderly as the RM figures suggested…

      • Hnh,

        remember, a person who hangs his hat on 1 set of statistics is illogical or an economist. We should all knew the pros and cons of statistics.

      • Of course, there’s no change in the trend for me as yet, declining man hours show that. But I’ve been waiting for a spike now for four months. That’s not one set of numbers. I’ve been sharing the Bill Evans view of the world. And that looks overly bearish at this point unless something changes.

      • I’ve been sharing the Bill Evans view of the world. Thinking 6% UE by mid year. That looks overly bearish at this point unless something changes. Yes, rising UE is still coming but not so high me thinks.

      • as much as i hate to admit it the RBA’s decision to hold was right.

        If you read MB Glenn Stevens im sorry for getting stuck into you last week!

      • I’m not betting on the numbers – well not directly, but I am holding off a house purchase in Melbourne for a year or two…

      • The plan to save a fairly hefty deposit while prices are at least flat seems to be working so far.

        The places we’re looking at (5-15 acres on the edge of the city) are easily down 20% from peak and I think they’ll be some of the worst hit as there’s a relatively small number of buyers for them.

    • Is it possible that some of the school leavers who showed up as unemployed in the Roy Morgan survey haven’t been actively looking for work?

      I think this would mean that they don’t get picked up as “participating” by the ABS stats.

      • According to the ABS you need to be actively looking for work for at least 4 weeks to be considered unemployed so I would imagine that a great many of them wouldnt be counted in the ABS survey yet would be counted in the Roy Morgan.

        There seems to be about a 0.5-0.7% jump in the Roy Morgan numbers between each December and January which would account for school leavers. But then the question becomes where did the rest of the 1.7% rise come from in January.

        The real unemployment seems to be happening for the youth of Australia and perhaps that is not being reflected in the ABS numbers and that is the reason for the growing gulf between the Roy Morgan and ABS numbers.

        “Youth unemployment (18-24yr olds) has increased to 24%, far higher than the next highest age groups (14-17yr olds: 9.5% and 25-34yr olds: 8.9%)” – Roy Morgan January numbers

      • According to the ABS you need to be actively looking for work for at least 4 weeks to be considered unemployed so I would imagine that a great many of them wouldnt be counted in the ABS survey yet would be counted in the Roy Morgan.

        it’s not quite “for at least 4 weeks” – actually “in the last 4 weeks”, which is open to the interpretation that if you were to be unemployed tomorrow & were looking right away you’d be counted. Unless the school leavers were christmas casuals and not looking since, they should have been picked up in Jan figures.

      • Runalltheway, there was recently an excellent BBC doco on GFC with UK emphasis that captured the dilemma of young unemployed very well. Further, the inexorable rise in graduates unable to find work, taking anything that comes along (if they were that lucky). Double whammy, ‘educated’ and unemployable – degrees in jobs that just don’t exist in any substantial number.

      • 3d1k, if that was the two part BBC series called “The Partys Over: How the West Went Bust” – I too thought it great. The narrator/presenter tended to get a bit excited at times but got the message across rather well.

      • Thanks 3D1K & Sebastionbear, I’ll have to track it down (once I’ve got organised and bought a TV!).

        It’ll be interesting to see how an early experience of unemployment shapes the young ones in Europe. Hopefully they come out stronger.

  3. From what I’ve gathered, the official numbers lag Roy Morgan by a couple of months? That, or the stats have completely divorced for whatever reason.

    • Its the other way to the best of my understanding.

      “The Roy Morgan Unemployment estimate is obtained by surveying an Australia-wide cross section by face-to-face interviews. An unemployed person is classified as part of the labour force if they are looking for work, no matter when.”

      “The ABS classifies an unemployed person as part of the labour force only if, when surveyed, they have been actively looking for work in the four weeks up to the end of the reference week and if they were available for work in the reference week. ”

      That says to me that there would be some lag between the Roy Morgan numbers and those of the ABS.

      If the divergence between the ABS and the Roy Morgan numbers continues to grow then there is something wrong here. Their methodology hasn’t changed yet the gulf between their numbers grows either someone is fudging the numbers or the methodology is flawed and only now is that becoming clear.

      I suppose we will see what the numbers say for Febuary if there is another large jump (+1.0%) in the Roy Morgan numbers and not any corresponding rise in the ABS numbers we need to reassess where unemployment is really at.

      • The result seems to be at odds with my ancedotal evidence / observation and media reporting. Given that it’s larger companies that are likely to be newsworthy it could be masking wider layoffs in the SME area.

        Hence, I’m with you – I suspect data manipulation, statistical abberation or a flawed ABS or RM methodology.

        The Bullhawks will love this and the more circumspect will cop a roasting for the next month. Don helmet and flak jacket.

        Lags in both UE and IR transmission effects suggest that Glenn shouldn’t be let off the hook yet. Media reporting suggests that UE is further along the delay timeline then IR relief. Those loosing their jobs or about to just haven’t hit the survey pool yet. I think only a small percentage of the survey pool turn over each month. SME labour hoarding cannot last at the rate they are going out the back door.

      • Side question..

        Why cant the ABS take data from ATO on full time and part time employed persons for the previous month.

        And further to that, why cant they take data from Centerlink of people on Newstart and class them as unemployed. In OZ if you unemployed , your usually on the dole, and it doesnt run out. ???

        Bit confused by with the advent of data mining, whey they use such a old tech of sampling 60k people and working from there.

      • “In OZ if you unemployed , your usually on the dole, and it doesnt run out. ???”

        No it doesnt run out you can be on the dole indefinetly technically speaking however you have to meet “participation requirements” which means you more or less end up working anyway just for practically no money.

        After you have been unemployed for more than 13 weeks you have to do 30 hours a week of study, paid work or volunteer work for the next 4 weeks in order to retain your payments.

        Once you have been unemployed for more than 12 months you automatically become part of work for the dole which you technically get paid for even though its only an extra $40 extra a fortnight or something along those lines. You then have to work for the dole by volunteering or working a certain number of hours every weeks or you get cut off. I am unsure if those people in work for the dole would technically be considered unemployed because they are technically employed by the government.

      • Tarric,

        We can pick apart the abs stats all day. We should keep in mind all of these considerations and note that such stats are only one in many that help (with other things) us arrive at logical decisions.

      • There are also probably some practical issues with obtaining this type of “real-time” data from the ATO – their systems don’t necessarily talk to each other, let alone those of the ABS.

      • ATO systems work fine to know that any bank in Australia pays me 0.01c in interest, to record against my tax return ?? 🙂

      • Oh yeah, they’ll get you for that :o)

        But it normally takes a year or two for them to get around to finalising the data-matching…

      • To the best of my knowledge, the ATO has no need to know how many hours per week you work, they only know how much you get paid, so they wouldn’t know if a person was employed full-time or part-time. I believe the self-employed only need to report their work activites to the ABS once per quarter. As for Centrelink, Newstart/Youth Allowance recipients and the unemployed don’t line up that well. People may be on the dole while studying or evading jobsearch requirements, and many unemployed may not be eligible for the dole due to assets, spousal or parental income.
        The other advantage of surveys over administrative data is that there are great incentives to lie to the ATO and Centrelink about your labour force status, while there is no incentive to lie to an ABS researcher, so in theory survey results are more truthful.

      • I wasnt talking about hours worked part, just raw FT and PT people.
        ATO knows if FT or PT because question 6 of the TFN declaration asks this question.
        What I was thinking is PAYG
        FT and paid tax – Employed FT
        PT and paid Tax – Employed PT
        PT and no tax – underemployed

        Obviously, above isnt a system to replace current stats. I just think there could be a better way using data mining from different commonwealth departments to come up with a truly comprehensive stats, rather than using a 60k people survey. anyway.

        Also, runalltheway it isnt 1 or 2 years. Last year I did my tax at the end of July, and they already knew it for the year (Less than 3 weeks) 🙂

        They know everything….Quick put my tin foil hat back on. 🙂

  4. Looks as though we are thus far, muddling through – official unemployment figures close to full employment – the envy of much of the developed world.

    May change, but RBA rate inaction was correct, on a number of levels.

  5. I can’t see the RBA lowering the cash rate due to 1.4 > 2% increase in hidden underemployment.

    I can see some of these underemployed reassesing holding a NG property.

      • yep, in the bizzaroworld in which we now live the strong employment data will be bad for housing. that little burst or “bottom” in housing some spruikers were talking about will be nothing more than a dead cat bounce. what the housing speculators need is lower rates and they aint getting them, more likely banks will continue to raise.

  6. I shouldn’t say this but keep it between ourselves. I once started work with a large recruitment company writing database queries for a periodic report they did for the ABS. One of the numbers looked bizarre. I drilled down and saw an order for 1,000 forklift drivers (for a single client) had been entered into the system. I spoke to someone who knew the system and asked for an explanation. “Oh, when the consultants don’t know how many, they just type 1,000 into the system”, I was told.

    Personally, I think the hours worked is the one I’d hang my hat on — the number of positions is irrelevant because hardly anyone works “9 to 5” anymore.

    The other thing is the layoffs that occurred lately won’t be picked up until the next survey or the one after. I would expect the hours worked to put in another big decline next month and that will affect incomes and spending. And with the dollar going higher, more spending at USA websites will occur.

    Bearish outlook remains intact for me.

  7. An industry-by-industry breakdown would be good, to see which industries are hiring amid layoffs being announced left, right and centre.

    • banks aren’t hiring. at least not middle management and back office staff, always room for another exec.

      could it be the case that aside from a small percentage job loss from banks, threats of 600 or so from smelters and qantas sticking it to the unions, most are holding on to their jobs?

      • banks aren’t hiring. at least not middle management and back office staff
        .
        My own sources indicated that (6 months ago.. doh!).
        .
        But let us turn to your area of expertise – how are you going to employ the bank middle management and back office people in the mines?

      • Then how is the mining boom going to save these people from certain long-term unemployment?
        .
        Are they supposed to satisfy themselves by watching the mining ads on TV? 🙂

      • Who specifically said that anyone was going to be saved from ‘certain long-term unemployment’ because of the mining boom? No-one.

        Powers that be have stated ad infinitum structural change to be expected. More so with the unwinding of the credit era.

        But as HnH has said, several times, the resource boom has prevented a rapid descent into conditions experienced by economies similar to ours minus the joy of mining.

        Learn to love it. While it lasts.

      • Powers that be have stated ad infinitum structural change to be expected. More so with the unwinding of the credit era.
        .
        So are you going to hide under the skirt of the establishment (who you politically oppose!) and their weasel words to explain away the Dutch disease?
        .
        The next time anyone uses the words “Structural adjustment”, “2-speed economy” and “jobless growth”, I am going to personally strangle them.
        .
        How can anyone call it structural, when we know the mining boom is going to end? It will leave us with very little in the short-term and nothing in the long-term. Even in the current boom, the employment numbers are coming from capital investments rather than BAU operations of the mines.
        .
        But as HnH has said, several times, the resource boom has prevented a rapid descent into conditions experienced by economies similar to ours minus the joy of mining.
        .
        It hasn’t, as velociraptor clearly points out above. With the high AUD, it has made it worse, much worse.

      • 1. “Structural adjustment”, “2-speed economy” and “jobless growth”. 🙂

        2. When the boom ends will simply have a different kind of structural adjustment, particularly if in conjunction with the unwind of the housing/credit/finance boom.

        3. It is not policy to manage the currency – An issue separate from the resources boom.

        4. As I say, high currency swings and roundabouts. Some difficulties for some export focussed sectors, manufacturing on decades long decline. Strong currency beneficial to household expenditure, import costs and fuel, to name a few. Don’t underestimate the importance of the positive aspects of the high AUD to the economy, particularly come election time.

        5. The real challenge we may face is the end of the credit boom, just as many other nations are facing now – but we’ve been Lucky…

    • “An industry-by-industry breakdown would be good, to see which industries are hiring amid layoffs being announced left, right and centre.”

      Sample size is too small for industry-by-industry figures to be much use over the short term. You can analyze long-term trends, but the sampling error gets in the way for anything shorter than a couple of years or so.

  8. Some words of reason from The Lorax:

    Please don’t read too much into the monthly employment survey. Employment has been flat as a tack now for over a year, hovering around 11,450,000 mark.

    The MoE for these surveys is HUGE and its been bouncing around the trend by tens-of-thousands every month.

    The ABS reports 46,300 new jobs (seasonally adjusted) but at the 95% confidence level that’s anywhere between -8,700 and +101,300.

    Who knows what the ABS does for seasonal adjustments for Dec and Jan, what with Christmas shopping, school leavers and uni graduates looking for work, and the rest of us on holidays.

    Look at the trend people! Its still flat. It will take several months of strong numbers for the trend to move up.

  9. Hours worked was @ 1,500,000 p/m year end 2007 and is presently @ 1,550,000 p/m = 3.3% gain. Population growth has been ~1.6% p.a. = 6.5% growth & unemployment was @ 4% y/e 2007. On a like for like basis year end 2007 c/w present unemployment/underemployment is @ 4 + 6.5 – 3.3 = 7.2%

  10. Don’t you dare delete this comment Mr Holes!

    TP: I’ll just edit it!

    He says says

    A slight uptick in the volatile labour force survey compelled almost the entire economics community to buy into the case for substantial RBA rate cuts. Today’s data will cause mayhem for many economists, who will be forced to once again revise their rate projections, and, to a lesser extent, the RBA, which was banking on a gradual increase – rather than a decrease – in the unemployment rate. It is also significant that this data coincides with a ream of other positive domestic and offshore newsflow, including healthy local business conditions, and business and consumer confidence, combined with better-than-anticipated data out of China, India, the US and Europe.

    Those hawks inside the Reserve Bank must be scratching their heads wondering – as I have many times here – whether its knee-jerk December rate cut was, in fact, a major policy error pushed by an increasingly dovish RBA board. The newest member of the ostensibly inflation-targeting RBA board, Heather Ridout, curiously told Bloomberg that she was a “dove” and would prefer to foster economic growth

      • +1

        Economies are contracting across the entire euro-zone, a sovereign default is on the cards with Greece, a series of bank failures is possible, and the contagion may spread to Spain, Portugal etc – but someone the data is better than anticipated? CJ is a great contrarian indicator in this case.

  11. Over the past 4 years hours worked has increased 3.3% wage rises were 3.5% p.a. = 18.6% total increase in wages and housing debt increased 32% from $923 Billion to $1218 Billion

    The slight problem here is that over 4 years housing debt has increased ~10 times faster than hours worked

  12. Mining BoganMEMBER

    Unemployment isn’t the killer. It’s the wages not keeping up with inflation that is hurting.

    Wages growing at 3% when real inflation is at 5-6%. That is what is hurting us.

      • Mining BoganMEMBER

        Agree.

        It will be. But that isn’t what has started the rot. Number one is wages not keeping up with inflation. Number two is disposable income not keeping up with unwise debt as a result.

        Unemployment is box number three.