November Labour Force Survey. Employment 37.0k, unemployment 5.1%, participation 65.7%
Employment was holding a solid pace into year-end with a robust 37.0k gain in November which was stronger than both consensus and Westpac’s forecast for 20k. In the year, total employment has grown 286.0k or 2.3% but the recent pulse in employment has lifted the six month annualise pace to 2.9%yr.
More surprising was the jump in the unemployment rate to 5.1% from 5.0% (market median was for 5.0%) due to a 0.2ppt lift in participation to 65.7% (65.69% at two decimal places) which drove a solid 49.5k gain in the labour force. It does appear there sample volatility had a role to play with the ABS noting that the incoming rotation group had a higher employment to population ratio than the group it replaced while the unemployment rate of the incoming rotation group was also higher than the whole sample and the group it replaced. Also the participation rate of the incoming group was higher than the group it replaced.
As such we would not define the November rise in unemployment as a softening in labour market conditions.
But what does suggest a softer tone for November was that all gains in employment were part-time (+43.9k) which was partially offset by a fall in full-time employment (–6.4k). Also on the soft side, hours worked fell –0.2% in the month. In the year to November total hours worked are up just 1.1%yr which is quite a bit softer than the 2.3%yr pace in total employment.
This month the gains were in Victoria (30.9k) and Queensland (21.8k) while NSW saw a –12.6k correction to the solid 20.2k in October.
More detailed analysis to follow shortly but this update on the labour market would give the RBA some comfort on how the Australian economy was tracking heading into the festive season.
