Australian November jobs reports blockbuster - analyst responses
We can debate magnitudes but overall all indicators suggest Australia currently has a robust labour market outside WA:
- Total employment has now grown 342k (or 3.0%yr) in the year to November (2.0%yr in September, 2.7%yr in October)
Grounds for a robust labour market are quite clearly defined:
- Other labour market indicators while not as robust as the labour force survey are still definitively positive
- The improvement in the labour market has been the greatest in NSW ... consistent with a rebalancing of growth away from production (and in particular resources) to services
- It is consistent with the recent positive update on economic growth
There are some issues that make us question the magnitude of strength of the survey
- The annual pace of employment growth of 3.0%yr look way too strong compared to our indicators of the labour market ... (they) are pointing to employment growth more around 2%yr.
- There has been a surge in female participation, particularly in NSW, which is driving the recent lift in overall participation... some suspicions that this may be more about sample rotation than any underlying change ... this group ... will be rolled out in December survey. If the theory that the May 2015 sample did pick up group of females in NSW that were more attached the labour force than normal, thus helping to boost both participation and employment, we should find out in the December survey as they roll out.
- It still looks as if the ABS is having a hard time seasonally adjusting the data post the changes they may to the supplementary surveys in 2014.
Gross flows suggests that the quality of the employment gains are not great as they are coming mostly from a reduction in voluntary separations. More worrying is that it appears we are seeing a sharp drop in new hirings which for now is being more than offset by fewer separations.
We are eagerly waiting for an industry breakdown (due on December 17th) to see if it can provide any further insight into the labour market.