The Australian economy has recorded another month of employment gains, with greater numbers of both full-time and part-time positions. The ABS released employment estimates for November which indicate the total number of people employed in Australia in either full-time or part-time work increased by 61,600. The figure was well in excess of the 19,000 expected.
Bond yields had dropped prior to the report’s release, after yields had fallen in offshore markets overnight. However, once the figures were released at 11.30am, yields jumped, especially on 3 year bonds. By the end of the day, 3 year bond yields were 9bps higher at 2.09% and 10 year bond yields increased by 4bps to 2.59%. In the currency market the Aussie moved higher against the USD and finished around 76.60 U.S. cents.
The unemployment rate came in at 5.4%, the same as in October and the lowest rate since January 2013. Despite the large increase in employment, the unemployment rate remained unchanged as the participation rate jumped from a revised 65.2% to 65.5%.
The total number of work hours across the whole economy increased by 0.6% when compared to October, as 41,900 more full-time jobs and 19,700 more part-time jobs were created. On a 12 month basis aggregate hours worked grew by 4.0% as 304,600 full-time and 78,700 part-time positions were created (after revisions).
ANZ senior economist Felicity Emmett noted the higher participation rate and what she referred to as the solid underlying momentum in the economy. However, in her view the growth rate is likely to slow. “We expect the labour market to continue to improve, although the trend is likely to moderate in coming months given that jobs growth looks to have overshot leading indicators.”
Westpac senior economist Justin Smirk was also cautious but for a different reason. In short, the statistical sampling process may be responsible for the higher figures. “[We] would caution before thinking November represents an acceleration in labour demand. The weaker than expected October print was associated with falling participation, pointing to sample volatility behind that soft print and so a statistical recovery in November was always possible…We do believe that is what happened in the November survey as the ABS did note that the incoming rotation group had a higher employment-to-population ratio than both the group it replaced and the entire sample. As such, sample volatility would explain a fair proportion of both the rise in employment and participation.”