On the face of it, the March jobs data from the ABS, which is out this morning, and the surprise fall in unemployment contained in it, is good news. But there’s a lot of noise in the numbers yet again.
Seasonally adjusted, the number of new jobs rose 18,100 in March, after a rise of 47,300 in February. But after the big jump in full-time jobs in February, reported as more than 80,000, (seasonally adjusted), the number of full-time jobs fell in March — by more than 22,000. At the same time the number of part-time jobs rose more than 40,000 after falling more than 33,000 in February. The unemployment rate dipped to 5.8% from 6.0% (and close to 6.1% on unrounded figures).
Confusing matters even more, the number of hours worked in March rose by an estimated 8 million after falling 14 million in February. And the participation rate fell 0.2 to 64.8%, after rising 0.2 to 64.8% in revisions to the February report.
So let’s take a step back and look at what the first quarter of the calendar year has told us about the jobs market. In the three months to March, the economy added 88,000 new jobs (seasonally adjusted), and 42,800 in trend terms, compared to 60,000 jobs seasonally adjusted for the whole of 2013 and 75,000 in trend terms. Since December the overall unemployment rate has fallen from 5.9% to 5.8% seasonally adjusted, while the participation rate has increased marginally in seasonally adjusted terms and remained steady in trend terms. Aggregate hours worked has increased 1% seasonally adjusted, whereas aggregate hours only increased a fifth of 1% over the whole of 2013.
That all suggests that, beyond the monthly volatility, the labour market is performing significantly better than in 2013 and that the fall in the participation rate that has marked recent years seems — for the moment — to have halted. And the sense that the labour market is turning seems to be supported by the ANZ job ads survey, which showed a revised no change in January (from an originally reported small loss), to a big rise of 4.7% in February and a 1% rise in March, for positive first-quarter growth. Certainly the graphs that come with the ABS report suggests there could be turning point for the labour market in the offing.
And if you look at other indicators, there’s a lot more good news. Retail sales are solid and growing nicely, building approvals are still growing and home lending is booming (up 2.3% in February alone), with investor loans adding to a growing pace of lending to buyers of existing homes and first home buyers. As well, car sales picked up sharply in March. Exports continue to do well with trade surpluses for four months.
It all suggests that Treasurer Joe Hockey’s December MYEFO forecast of economic gloom and doom (and lower tax revenue because of it) is looking even sillier than it has for the last three months, no matter how much Treasury insisted the IMF stick to it.
The only threat in all this is the dollar, which already had upward momentum before this jobs report. After the report was released at 11.30am today, the dollar jumped to US$94.30 — yet another high for this year, and up half a cent in a matter of minutes. The headline the punters in the forex market are reading is one of the golden oldies — “rate rise looms”.
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