Employment in detail

By Leith van Onselen

As Houses & Holes reported earlier, the Australian Bureau of Statistics (ABS) this morning released the labour force data for the month of March and it was very good.

In seasonally adjusted terms, total employment increased 44,000 (0.4%) to 11,491,200. Full-time employment increased 15,800 (0.2%) to 8,080,400 and part-time employment increased 28,200 (0.8%) to 3,410,900.

The below chart shows the changes in these components since April 2008. As you can see, this month’s employment gain of 44,000 persons more than offset the prior month’s job losses (-15,400 persons):

The total level of employment in Australia has now reached an all-time high, surpassing the previous peak reached in January 2011, although the trend in jobs growth is still quite flat:

On a rolling annual basis, employment growth was 0.33% in March, which is slightly above the low of -0.01% reached in December 2011:

Despite the creation of 44,000 jobs – and increase of 0.4% – the headline unemployment rate remained steady at 5.2%. This is because the labour force participation rate also rose by 0.2%, helping to offset some of the employment gain (see below chart).

This is a welcome development. The solid increases in the labour force participation rate in January and March have helped to offset a downtrend that had developed since October 2010, presumably due to discouraged job seekers leaving the workforce:

Another positive from the release is that the aggregate number of hours worked rose by 9.5 million hours in March:

The annual change in aggregate hours worked has also turned positive – up 0.9% in the 12 months to March 2012, although there is a large divergence between the mining and non-mining states:

Turning to the state-by-state breakdown, all states except for Tasmania added jobs in March, with New South Wales and Victoria leading the way:

Over the year, however, it’s the mining states that have dominated the job creation stakes, with Victoria is the clear laggard:

Reflecting its status as Australia’s resources capital, Western Australia has by far the lowest unemployment rate in the nation (4.1%). New South Wales’ unemployment rate fell sharply in March (to 4.8% from 5.1%), whereas Victoria’s rose sharply (to 5.8% from 5.5%). Tasmania has the worst unemployment in the nation at 7.0%:

So overall it’s an unequivocally strong result, which must count against the Reserve Bank of Australia’s promised lowering official interest rates at next month’s board meeting. The official ABS result also continues the divergence between it and the unofficial Roy Morgan measure (more on this later).

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Comments

  1. The historical divergence between the ABS and RM suggests to me that we should suspend celebrations until it is explained/resolved. Something has shifted. We just don’t know what it is. Also, what’s with NSW and Victoria leading the way last month? Something funny going on.

    • Bill Mitchell will no doubt dissect it this evening since the labour market is his speciality.

      I was going to say (without checking) that this is about the third solid uptick in employment since the end of 2010, the other two looked briefly promising but then fizzled out again. But this is the third positive monthly result in a row, so……….

      Would be a shame if an employment growth recovery were getting underway, only to have the federal government’s slash and burn approach scuttle it.

  2. This is weird. Is there a sectoral breakdown? It would be good to see where the jobs actually came from, particularly in light of insolvencies jumping at the same time.

    • Waynes Black Swan

      Was thinking that this arvo. 28,200 is alot of part time jobs but it’s not much chop if the best we are able to do is put on more pizza delivery drivers.

  3. Why on earth anyone would think that unemployment would rise significantly whilst the federal government continues to borrow circa $1bn per week, mostly from offshore, and pump that into the economy is very curious from my view. Its all noise.

    Let’s see what happens when the pumping ceases.

    • +1.

      Why we would consider cutting rates in this environment is beyond me. Then again, I hear the retail boffins are telling us we have deflation in everyday groceries. Believe that and I’ve got a bridge to sell you.

      • +1

        The Fed Govt is on a binge of foreign borrowing to fund its expenditure. One can make a fair guess as to where that injection is being spent?

        First question you need to ask in this democracy is “Where are most of the seats?” The answer is clear…Sydney and Melbourne.

    • I’m thinking why on earth the ABS or Commonwealth Government isn’t counting CentreLink Claims that are titled, New Start or Job Search Allowance (whatever it is called now). Instead of starting with, “Are you over 15 years old?”, as the first question in their survey.

      Hold on…! Why on earth are we borrowing $1B per week?

  4. > It would be good to see where the jobs actually came from, particularly in light of insolvencies jumping at the same time.

    More debt collectors

    • I was thinking something similar. I know insolvency lawyers are pretty busy, as are receivership firms, but I doubt they’ve hired 44,000 people in the last month.

    • More Govt in some form JPK…who the hell else is expanding businesses in Sydney and Melbourne…ah yes sorry…lawyers!

  5. UE,

    So when you said yesterday:

    “I’ll wait for tomorrow’s ABS labour force release before making any judgements. So should you”

    in response to my comment that:

    “I don’t see anyone at MB disowning the Roy Morgan unemployment numbers even after many months of divergence from official ABS stats.”

    you were obviously expecting ABS to move up today towards the RM results. Given the rubbishing of AFG’s mortgage data yesterday after “two months of divergence” as you put it, are we still sticking to RM as a decent indicator of the official unemployment rate?

  6. thomickersMEMBER

    i’m guessing that breaking even from a 3.4% budget deficit to GDP leads to a reduction of employment by 3.4%?