jobs

“Thud” — that was the sound of the jaws of the collective pet shop economists falling open in astonishment after they missed yet another month of jobs figures from the Australian Bureau of Statistics by forecasting a significant worsening in May that didn’t occur.

The latest data from the Australian Bureau of Statistics showed a small fall in the monthly unemployment rate of 5.5% (seasonally adjusted) for May from 5.6% for April and just 1100 new jobs created in the month — all part time.

For yet another month, a big rise in the jobless rate has been averted, as has a surge in the number of jobs lost and unemployed. But it was also a month where the strains in the jobs market are clear for all to see. It is not in a good condition, but is still showing resilience.

Forecasts for job losses ranged from 10,000 to 25,000. A survey by AAP of 13 economists forecast a rise in the unemployment rate to 5.6% from 5.5% in April and the loss of 10,000 jobs. That didn’t happen, just as forecasts for a loss in April were too gloomy.

There were actually solid rises in full- and part-time jobs among men, and falls for women in both categories.

It was yet another month this year when the forecasts from market economists and media groups have been wide of the mark, after they missed the big rises in February and April.

And while more than 5300 full-time jobs were lost in the quarter, the participation rate fell slightly to 65.1% and the number of hours worked fell by a more substantial 11.5 million hours — the jobs market as a whole wasn’t crunched.

That’s not to say that the jobs market isn’t weak — it is, and this morning’s report tells us that the small improvement in the actual jobless rate of 0.1% is really a statistical oddity and nothing more. The ABS reported:

“The ABS reported the number of people employed increased by 1,100 to 11,663,300 in May. The increase in employment was due to increased part-time employment, up 6,400 people to 3,509,600, offset by decreased full-time employment, down 5300 to 8,153,600. The increase in total employment was mainly driven by an increase in male part-time employment.

“The number of people unemployed decreased by 3600 people to 682,900 in May.”

The ABS monthly seasonally adjusted aggregate hours worked series showed a decrease in May, down 11.5 million hours to 1,628.5 million hours. The trend estimate for the unemployment rate rose to 5.6% from 5.5% and the number of people unemployed rose to 687,700 from 682,900. Aggregate hours worked rose (not fell).

There are a few questions in the trend estimates as well as in the seasonally adjusted figures. The rise in the number of jobs, the rise in hours worked and a steady participation rate (65.3%) all sit oddly with the rise in the unemployment rate to 5.6%.

The state breakdown provides little help. The ABS said the “largest absolute increases in employment were seen in Victoria and South Australia, with increases of 11,400 and 4,700 people respectively (seasonally adjusted). The number of employed people decreased in New South Wales and Western Australia, down 1700 people and 800 people respectively (seasonally adjusted).”

The NSW seasonally adjusted jobless rate jumped to 5.6% from 5.3% in April, but Victoria recorded a sharp fall — to 5.4% from 5.8% and a big drop in Western Australia — to 4.9% from 5.3%, reversing some of the previous weakness. Queensland saw a small rise to 5.8% from 5.7%.