Signs of improvement in NSW & Vic but weakness in WA and some sectors you would think should be more robust.
Weekly payrolls continue have small moves around a flat trend but the last week did show a promising improvement particularly in NSW and Vic. However, there has been a concerning dip in payrolls in WA with further worrying signs of weakness in some sectors.
For the headline, in the month (4 weeks) to September 19th payrolls fell –0.2% to now be down –4.1% since March 14.
Total payrolls did lift 0.4% in the two weeks to September 19th which is a promising sign that number of employees on ATO payroll register is starting to improve. The momentum was also a promising with flat print for the week ended September 11th shifting to a 0.4% gain for week ended September 19th.
For a guide to the Labour Force employment estimate we look the average of payrolls in first two weeks in September on the average for the first two weeks in August. This measure fell –0.7% in September. Our forecast –50k/–0.4% decline in employment in September, using current seasonal factors, is equivalent to a flat 2.2k/0.0% print in employment in original terms.
We do, however, caution that payrolls provided a very poor guide to the August Labour Force Survey. Employment rose 111.0k/0.9% in the month while payrolls fell –0.3%. In original terms (payrolls are not seasonally adjusted) employment rose 0.4%/44.5k in August still significantly different to decline in payrolls. Part of the problem is that payrolls captures employees and tends to miss the self-employed. This may be an important consideration as we move into October and the changes to JobKeeper criteria are implemented and payments to workers are adjusted.
In the month to September 19th the weakness has been in Victoria (–0.5%), NSW (–0.2%) while Qld was flat. What is a little surprising is there are signs of weakness in WA with payrolls down –0.2% in the month. Payrolls lifted in SA (0.6%) and Tas (0.3%).
By sector, in the last four weeks we continued to see an improvement in jobs from accommodation and food services (+5.2%), education (2.4%) and utilities (1.4%) while the recovery in arts & recreation (0.9%) and finance & insurance (0.7%) has been more mute. Job losses occurred in transport (–4.0%) agriculture (–2.5%), construction (–2.3%), professional & scientific (–1.8%), information & media (–1.4%), mining (–1.2%), other services (–1.2%) and somewhat surprising public administration (–0.4%) and health & social services (–0.3%). The on going decline in retail trade (–0.7%) is a concern given is size as an employer.
Some travel recovery and Victoria reopening will help. But really worrying signs more broadly as we go screaming off the fiscal cliff.
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
