Two reasons why Australia’s July jobs data is still not appealing

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Australian Economy

 

The number of Australians who found new jobs in July rose by 11,800 to 11,955,100, according to the latest trend figures announced by the Australian Bureau of Statistics (ABS). The seasonally adjusted employment numbers showed an increase of 26,200, bringing down the unemployment rate by 0.1 percent to 5.7 percent. Markets were although expecting an addition of 10,000 jobs in the labour force for July while the unemployment rate was expected to remain steady at 5.8 percent, in the seasonally adjusted figures.

Full time employment in Australia refers to those people who work 35 hours or more during a week. Over the last 12 months, trend employment in the country grew by 212,300 or 1.8 percent, in line with the annual long term average percentage growth, while the trend employment to population ratio increased slightly to 61.1 from 60.9.

 

The complete stats of the July jobs data are highlighted in the table below:

a1.png

Labour Force Data (Source: ABS)

The monthly trend unemployment rate is a widely used measure to study the underlying behaviour of the labour market as it smoothens out the more volatile seasonally adjusted figures, has remained at 5.7 percent, since May 2016. The trend figures show a rise in part time employment in July. Since January 2016, part-time trend employment has risen by 82,600, while full-time employment has decreased by 21,600 over the same period. Despite the decline in full- time jobs, the trend monthly hours for all jobs in July rose by 0.9 million hours which is an increase of 0.1%, to 1,655.6 million hours.

Likewise, the seasonally adjusted rise in labour force for the month of July 2016 was a direct result of growth in part-time employment. The seasonally adjusted figures for part-time employment in July improved by 71,600 whereas full- time employment shrank by 45,400, in line with the trend from January this year, where part-time employment spiked by 101,200 and full time slipped by 19,900. However, the fall in full- time employment failed to deter the rise in monthly hours, which surged by 3.7 million hours.

On a region by region basis, Tasmania was the only one demonstrating a drop in jobs for the month while largest employment increase was witnessed for Queensland outperforming others.

 

To summarize, the main concerns from the July employment numbers include-

  • Decline in full-time employment has been a key concern. Further, the decline does not reflect in a corresponding fall in the monthly hours worked which otherwise have increased. However, hours worked are also slipping for many years on a per capita basis.
  • Rise in employment figures has been strongly supported by part-time employment, not just in July, but in most of the months since January 2016. This however, has been fluctuating as seen in data from last month wherein part-time jobs contracted by around 30,000.

a2.png

Employment to population ratio (Source: ABS)

 

Overall, there are mixed sentiments floating around with regard to the above data highlights.

kunalsa1 (1)


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