Courtesy of Forexlive comes this summary on today’s jobs report:
Westpac:
- A sound update
- Stepping back from the monthly volatility, the three month average change in total employment was 12.6k in June from 26.0k in May, 25.8k in April and 27.6 in March
- Hours worked are robust but have moderated from their earlier surge, lifting 0.3% in the month but with base effects the annual rate has moderated to 1.2%yr from 2.0% in May
- Hours worked weakened in the last quarter of 2014 to 0.3%yr
- Breaking down of the details of the survey we see mixed picture
- Part-time employment has grown 90.9k/2.6%yr compare to 133.5k/1.7%yr for full-time employment. Given this we are not surprised that households remain less optimistic about the labour market than what the Labour Force survey is suggesting
- Our current forecast for the unemployment rate to peak at 6½% in 2015 is based on participation holding around current levels
UBS:
- “Overall, lower core CPI could still trigger the RBA to cut rates again, but the jobs data is consistent with an on-hold RBA”
- Data better than expected
- Jobs are close to a 4 year high
- Note record low wage rates, weak income
- While employment is currently resilient, it could soften as the capex spending falls
RBC:
- A labour market that has spare capacity, but reasonably stable in terms of the unemployment rate
- It’s a labour market that is still broadly consistent with the mild easing bias that’s there right now
- We think there’s still scope for further (interest rate) easing, but don’t think it will happen anytime soon
JPMorgan:
- data is too early to incorporate the global news we’ve had more recently with respect to Greece, the issues in Europe and China
- But it does show you that if you are looking at the Australian economy alone then things are looking pretty stable
- Based on this data, I don’t think the RBA would be doing anything
- They’d obviously be watching the global events
CBA chief economist Michael Blythe
- Data shows the economy is in reasonable shape despite the many concerns out there at the moment
- When you look at a range of other indicators like the surveys for job vacancy measures and the figures we’ve seen in the labour force surveys, these figures are in line with those alternatives so they look like a reasonably approximation of what’s happening in the labour market
This is rot I’m afraid and not because of Shanghai or Grexit. You cannot look at the labour market in isolation like this and be of any use to anyone for anything. That is just drawing a trend line with a ruler which a monkey can do.
The labour market is going to weaken because we know that:
- the terms of trade shock is going to continue
- the capex cliff is steep
- public austerity is not letting up
- house price growth is peaking right now on MP tightening and the residential construction boom is topping as well meaning no new labour demand will be created
- consumers are cautious
- the car industry is about wind down
This was always going to see the labour market weaken from the end of this year and into next and have the RBA cutting before the year was out.
Add Shanghai and Grexit and you can now bring that forward.
Markets economics needs a big overhaul. The days of metronomic credit, income, demand and investment growth are over. That was the Great Moderation. Now is the Great Volatility.
