Australia’s jobless rate hit a near 12-year high in October, but economists remain skeptical of the figures.
The Australian Bureau of Statistics is still ironing out the issues with its labour force data after extraordinary results in July and August forced the bureau to admit there were problems with its calculations.
It has since taken another stab at calculating the data up to September using a new method, but economists remain cautious about how reliable the figures are.
“Call us cynical but we aren’t accepting the accuracy of the data at face value,” Citi economists said.
“We aren’t convinced that the data are completely free of problems.”
Citi hopes the truth will be revealed when the final outcome of the ABS review is released in December.
Thursday’s report showed that unemployment held steady at 6.2 per cent in October, a near 12-year high.
More than 24,000 jobs were added to the economy, taking the total number to 11.6 million, mainly driven by a boost in full-time jobs, which rose 33,000 to 8.1 million.
The figures look positive, if you can actually believe them, TD Securities head of Asia-Pacific research Annette Beacher said.
“While we want to believe this is a solid report, a long shadow remains cast as the issue of seasonal factors remains unresolved,” she said.
“We suspect that policymakers (RBA, Treasury, etc) will continue to treat this series with some caution.”
ANZ economists said the figures suggested a modest improvement in the jobs market between September and October but painted a much weaker picture compared to other indicators which suggest conditions are improving.
“Our view remains that the labour market should not deteriorate any further, with most unofficial statistics pointing to some gradual improvement in labour market conditions,” they said.
“Given the significant changes that have occurred to the labour force survey recently, the underlying trend is difficult to ascertain from the official statistics.
“We continue to suggest more weighting should be placed on other labour market indicators.”
JP Morgan economist Tom Kennedy was more trusting of the figures.
Unemployment would track higher into 2015 before moving downward later in the year, he said.
“We do think these numbers are an accurate reflection of the labour market,” Mr Kennedy said.
“Unemployment has softened over the past year and we think there’s probably a little more upside – it’s going to move a little higher as we get to 2015.
“But over the longer term, by the middle of next year, with growth recovering and the global economy doing a little bit better and we should have a lower Aussie dollar, when you put those things together, we should start to see some gradual decline in the jobless rate.”
