Boom goes labour market!

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The ABS has released Labour Force figures for February and the news is a complete blowout:

  • Employment increased 47,300 to 11,530,800. Full-time employment increased 80,500 to 8,049,900 and part-time employment decreased 33,300 to 3,480,900.
  • Unemployment increased 9,800 (1.3%) to 742,200. The number of unemployed persons looking for full-time work decreased 24,100 to 525,000 and the number of unemployed persons only looking for part-time work increased 33,900 to 217,200.
  • The unemployment rate increased 0.1 pts to 6.0%, based on unrounded estimates.
  • Participation rate increased 0.2 pts to 64.8%.
  • Aggregate monthly hours worked decreased 14.0 million hours (0.9%) to 1,608.9 million hours.

It’s a very good result but the same occurred in February last year when much of the gain was the result of the ABS sample rotation. It appears we may have something similar at work here.

Nonetheless, the dollar piled on one cent to 90.8. 30 pips of that was before the release, mysteriously.

More to come!

David Llewellyn-Smith

Comments

  1. migtronixMEMBER

    AUD boom! Who didn’t see that coming.

    Look at AUDJPY turning from short to long when NKY futures started getting bid around 3am was killer! These guys are getting too predictable

    • reusachtigeMEMBER

      That’s not possible around here. I’ve been trying to tell you all for months that the ails listed on this site are not happening and it’s time to leverage up into housing! BOOM!!!

  2. That is an amazing result. 80,000 Full time jobs, there is some sort of statistical affect here. I think it was a similar time last year that they changed the sample and a ridiculous amount of jobs were created.

    • I completely agree Rod, the exact same thing happend in the Feb 13 numbers where the economy magically created 71k net jobs for that month.

      Its all in the seasonal adjustment in Feb 13 only 15k net jobs were actually created, yet the seasonal adjusted numbers showed 71k.

      This month solely in trend terms only 8.5k jobs were created, however 7.2k people became unemployed. The wonders of seasonal adjustment.

      • Nearly as good as the birth/death adjustment the yanks use to make their unemployment numbers look good!

      • Never let the truth get in the way of a good story!

        They have to fudge, tweak and deceive at every opportunity to keep this Ponzi afloat.

    • The seasonally adjusted monthly numbers can be quite “noisy”, and have a reasonable margin of error. Best to look at the trend numbers for “number of jobs created” etc, which smooth out the volatility from the SA prints.

    • mine-otour in a china shop

      Link to ABS methodology update:

      http://www.abs.gov.au/ausstats/[email protected]/Latestproducts/6202.0Main%20Features3Feb%202014?opendocument&tabname=Summary&prodno=6202.0&issue=Feb%202014&num=&view=

      The ABS say between 29% and 37% of the increase was due to the sample rotation. Also the reseasonality calculations boosted employment but to a lesser extent.

      The ABS needs to work on improving its sampling size. The bounces in the data is far too high and the switch between PT and FT employment are also too large.

      I’ll hold sway on reacting to the theory that the release could have been leaked given A$ movements.

  3. All in NSW and Queensland.

    Unemployment rate in WA has sky rocketed to 5.9% sa. and is now higher than NSW.

  4. C.M.BurnsMEMBER

    I cannot recall anyone on this site predicting this… quite the opposite. I sure didn’t.

    It may sound like sour grapes but this almost seems to good to be true. I’m in Sydney, read papers, talk to colleagues, friends, small business owners etc. I have NFI where these jobs were created, either geographically or in which industry.

  5. What is the catch here ? Could the participation rate have anything to do with this ? What does Roy Morgan have to say ?

  6. boomengineeringMEMBER

    Burns,
    I’m with you all suppliers I talk to say things are quiet. That’s the gauge I use. If no one is buying consumables means not much work being done.

  7. Aren’t the gains totally offset by the participation rate? These numbers seem to occur due to vagaries of the number gathering process.

    • Pretty much i assume that is why we “created” 80k new full time jobs but total unemployment stayed at 6% ?

      Cooking the books will only keep you warm for so long.

    • Only China and the like have dodgy companies putting out dodgy stats to mislead us all as opposed to reality.
      It’s a bit like corruption, only happens in second tier countries.

  8. The RBA has been stimulating the economy with the lowest rates in memory for some time while employment has not yet started to fall dramatically in mining/resource processing and transportation.

    The RBA has got housing demand and construction going and it will soak up a share of the unemployment coming over the next few years from mining/processing/trasportation investment collapse and car industry.

    However by 2015/16 the growth in unemployment will overwhelm the increased employment in construction unless infrastructure projects are in progress by that time.

    The big question is will Abbott’s anti-union ideology delay infrastructure until the unions are broken completely or will re-election (and therefore minimising unemployment growth) matter more?

    In the former unemployment, recession, ZIRP and maybe a change back to Labor, in the latter infrastructure boom and a good economy for a while longer and reelection of coalition.

  9. Why are we still reporting seasonally adjusted figures? It makes no sense to report data collection errors and data noise.

    Look at the trend.

    Headline should be “Labour market much the same as last month”

    But watch the media confusion for the next 24 hours. There is a reason the ABS has prioritised the trend numbers in its releases.

    Look how different the picture is when you report the trend.

    Employment increased to 11,502,200.

    Unemployment increased to 733,700.

    Unemployment rate increased 0.1 pts to 6.0%.

    Participation rate remained steady at 64.7% from a revised January 2014 estimate.

    Aggregate monthly hours worked increased 2.1 million hours (0.1%) to 1,610.8 million hours.

    I’m not looking to find bad news in every story. But there is actually really no news in this release. The direction of the trend movement in unemployment rate and aggregate hours work is unchanged, the participation rate is unchanged. There is no boom here.

      • Yeah maybe market care – depends what their expectations are, and they probably only care because they think others will care (so much for economically rational markets).

        But my understanding is that readers come here to avoid to nonsense they can get elsewhere.

      • Jobs numbers are ludicrously volatile, and the month-to-month movements should be ignored by a rational market, but like you say, its what the markets trade off.

      • It also gives The Kouk a chance to do some gloating…

        a clear turn in the labour market, as evident in today’s data, suggest the RBA will get smart and will start a rate hiking cycle in the next few months.

        Its one thing for markets to bounce around in response to the monthly jobs yo-yo, but for a serious economist to draw any conclusion from a single jobs number is ridiculous.

    • The ABS says…

      The incoming rotation group for February 2014 had a higher proportion of employed persons and persons in the labour force (i.e. less persons not in the labour force) than the sample it replaced. This incoming rotation group contributed, in original terms, 37% of the increase in total employment and 29% of the decrease in persons not in the labour force in February 2014. The trend estimates provide a better measure of the underlying level and direction of the series especially when there are significant rotation group effects.

      http://www.abs.gov.au/ausstats/[email protected]/Latestproducts/6202.0Main%20Features3Feb%202014?opendocument&tabname=Summary&prodno=6202.0&issue=Feb%202014&num=&view=

  10. Mining BoganMEMBER

    Well, that’s it then, isn’t it? It’s all good. Nothing to see here so I may as well go play golf.

    See youse around.

    *waves*

  11. The sample the ABS does is so small whether it goes up or down you need at least 3 months to get a proper view of whats going on.

    These moments are great for speculative traders as the Melbourne cup is for gamblers.

    There were revisions upward on previous months but also last month there was a revision down on the past months. Some month have had heavy revisions down.

    The rate is still 6% even with the # of jobs out there. Likely came from the participation rate and people moving from the P/T group. These numbers are too volatile.

    The gut says hey maybe some businesses took on a heap of school leavers at a cheap rate. Or maybe the ABS has been taking tips from the statisticians in China.

  12. Better get the Pascometer out later today. This will be another beat the ‘bears piece’ from the consummate optimist.

  13. Go The Kouk. He’s on fire today!

    Stephen Koukoulas ‏@TheKouk 1h
    Aside from the bleeding obvious fall in mining investment, all else now strong, very strong or rampageingly strong in the economy

    Stephen Koukoulas ‏@TheKouk 1h
    AUD 0.9065 and on way to 0.9500 and beyond it seems

    Stephen Koukoulas ‏@TheKouk 1h
    My latest: Jobs growth catches up with the economy; RBA hike looms large http://thekouk.com/blog/jobs-growth-catches-up-with-the-economy-rba-hike-looms-large.html#.UyEA0P226f0

    Stephen Koukoulas ‏@TheKouk 1h
    No surprise in the jobs data – the economy has been strong enough for last 6 months – it was always about a lag

    • I’m with the Kouk.

      There is no emergency.

      Time for interest rates to return to neutral.

      Time for an end to the RBA’s failed monetary policy experiment.

      • Yeah lets finish the job we started in 2010-2012. Lets hollow out what’s left of the economy so that all we have left is houses and holes.

      • That’s right Lorax and we’ll do exactly that by leaving rates at emergency levels for no reason.

      • This might help you – C&P – from another thread.

        Lookie Lookie migtronix – Evaluation of the BoE statement on endogenous money. They aren’t QUITE ready for 100% endorsing Post-Keynesian endogenous money theory quite yet… H/T P Pilkington

        Quarterly Bulletin
        2014 Q1

        • This article explains how the majority of money in the modern economy is created by commercial
        banks making loans.

        • Money creation in practice differs from some popular misconceptions — banks do not act simply
        as intermediaries, lending out deposits that savers place with them, and nor do they ‘multiply up’
        central bank money to create new loans and deposits.

        • The amount of money created in the economy ultimately depends on the monetary policy of the
        central bank. In normal times, this is carried out by setting interest rates. The central bank can
        also affect the amount of money directly through purchasing assets or ‘quantitative easing’.

        http://www.bankofengland.co.uk/publications/Documents/quarterlybulletin/2014/qb14q1prereleasemoneycreation.p

  14. Of course employment stats can look good in a nation through a long property price bubble, because of the artificial stimulus to the economy of the “wealth effect”.

    What everyone needs to be aware of, is the important of how well the “tradables” sector of the economy is doing. But 99.9% of people wouldn’t have even heard of the term.