The October labour force figures have come out a bit better than expected, but were still nothing to write home about.
The unemployment rate was unchanged at 5.4% in October. Meanwhile, employment – the seasonally-adjusted number of people with jobs – rose by 10,700 or 0.1 per cent between September and October, the data from the Australian Bureau of Statistics (ABS) released on Thursday showed. It was about double what economists had expected.
But, even if it continued for a full year at that pace it would still only lift employment by 1.1 per cent.
That is a manifestly inadequate growth rate, given the working age population is expanding at an annualised pace of 1.8 per cent.
The bureau’s trend measure of employment shows growth of only 2,400 per month, giving an annualised rate of only 0.2 per cent.
It’s a better trend than the minus 1,000 per month reported a month ago, but either way the trend is still virtually flat.
And the aggregate number of hours worked, according to the bureau’s estimates, were down by 1.2 per cent in October from a year earlier and currently on a flat trend.
The measured participation rate – the proportion of the working-age population active in the labour market – edged back to 65.1 per cent in October, from 65.2 per cent previously.
As a result of the slower growth in the pool of available workers, the weak rise in employment was not enough to push the unemployment rate up from September’s 5.4 per cent.
Medium-term trends in participation generally reflect the strength of the labour market.
The decline since the peak of 66.0 per cent in late 2010, when the trend in employment growth was nudging 40,000 a month, is consistent with slower growth in demand for labour.
It has also masked the impact of slower jobs growth on the unemployment rate.
All else being equal, if not for the fall to 65.1 per cent in October from 65.5 per cent a year before, the unemployment rate would have risen to 5.9 per cent.
Recent indicators, notably the ANZ’s monthly count of job ads, continue to signal poor labour market outcomes until well into 2014.
