The ABS has released the January Labour Force figures and they came in at -7.8k (s.a), lower than the market expectation of a +13k rise and unemployment hit 6.0% against an expectation of 5.8%. The local bond market dropped 2bps on the news before recovering a point and the AUD/USD exchange rate acted in a similar fashion. Prices barely moved in the cash market after the release but equity markets rallied, partly as they are factoring in a likely interest rate cut from the RBA.
The total number of people defined as unemployed rose 30.2k with full-time employment decreasing 40.6k and part-time employment increasing 32.7k. The participation rate remained stable at 65.2% (December’s figure was revised up from 65.1%). Total employment increased by 2.6% in the year to January while seasonally adjusted monthly hours worked in all jobs rose 0.7% to 1,656m hours, which is +2.0% over the last 12 months.
Economists were looking for a steady unemployment rate to match December’s 5.8% (s.a) rate but the labour force figures continue to attract a level of doubt as to the accuracy of the survey. UBS said, “ABS ‘matched sample’ data is still too unreliable to make a strong conclusion” and ANZ referred to the survey process as producing a “lottery”. Westpac was less forceful in its view of labour force figures but questioned “the magnitude of recent strength” all the same.
