From Fairfax:
“The labour market survey has a history of wild moves and we can’t rule out the possibility that these figures are providing a pretty big bum steer,” Dales says. “But even underneath the salty surface the labour market does appear to be strengthening.”
Here are a few other economist reactions:
Barclays economist Kieran Davies:
I think the numbers are exaggerated by sample rotation. Almost all the gain in jobs in the month was due to people rotating to the sample and not quite matching the characteristics of the people who rotated out. Definitely the numbers are overstated but there’s still some better results than what the market had anticipated.
RBC Capital Markets strategist Michael Turner:
You can’t ignore these numbers forever. They are strong, unemployment is low and is running ahead of most other indicators on the labour market. Even though they improved, they don’t go to that extent. We have the unemployment rate at 6.5 per cent over the course of next year, so 5.8 per cent now makes it harder. We have a rate cut (forecast) for Q1 and (this jobs report) does not help our argument.
TD Securities chief Asia macro Strategist Annette Beacher:
We are skeptical that a sub-trend economy with shrinking domestic demand is generating jobs at a pace this year that is literally multiples of recent years. Employment in original terms used to shrink in October and November (2009-13) but in 2015 a large number of jobs were created, hence these consecutive outsized seasonally adjusted estimates have dropped out. All the RBA will take away from this report is firmer employment growth and a lower unemployment rate. Everything else should be taken with a large grain of salt.
JPMorgan economist Tom Kennedy:
We looked at the October number as almost too good to be true and you look at today’s number and it blows it out of the water even more. So two very, very strong back to back months and it’s very difficult to pin any drivers down because economic growth is still pretty soft. The firms are hiring, but I don’t know if the pace they’re hiring at is at multi-year records. It looks very very strong, almost too good to be true so they (the RBA) don’t over-react to one or two months of data, so they’ll see how the trend settles out and what the data does in the next one or two quarters.
ABS ineptitude has done the country lasting damage here. Rate cut odds for next year crashed from 70% to 4%0 putting all sorts of pressure on the dollar and bonds. Sort it out, ABS.
