The run of controversial labour force figures continues. The ABS released September employment estimates which indicated Australia’s unemployment rate had fallen to 5.6% from August’s figure of 5.7%. However, the total number of people employed in Australia in either full-time or part-time work fell by 9800 during the month, in contrast with the market’s expectation of +15,000. The participation rate also fell, from 64.7% to 64.5%.
The ABS was at pains to point out how the estimation process was affected by an incoming group in Queensland, stating its influence had “been temporarily reduced as part of the estimation process. The data will be further reviewed when October data are available.” The labour force figures have attracted some criticism in the past and such adjustments are not likely to help the ABS rebut accusations of fudging the figures.
A comment attributed to Macquarie (but unable to be verified by YieldReport) suggested that if the participation rate had remained unchanged over 2 months then the unemployment rate would have risen to 6.1%.
While a lower unemployment rate is good news, lower total employment and a lower participation rate is not. August figures were also amended and employment numbers were revised down by 10700 and unemployment was revised up by 4200, so the August unemployment rate was 5.7% instead of 5.6% as recorded at the time. However, total hours worked recovered and rose by 4 million hours to 1660 million.
The local currency fell 0.3 US cents on the news and then proceeded to fall further so by late afternoon it was down around 0.5 US cents. The 3 year bond yield fell 3bps to 1.64% while 10 year bond yields fell only 1bp.