Unemployment steady, but almost 50,000 find work

March 14, 201412:36 pm267 views
Unemployment steady, but almost 50,000 find work
Unemployment steady, but almost 50,000 find work

The unemployment rate remained steady at 6 per cent, despite the addition of almost 50,000 jobs last month.

Bureau of Statistics figures estimate that 47,300 jobs were added in February, seasonally adjusted, driven totally by an 80,500 strong rise in full-time positions.

Part-time jobs fell 33,300 in the month.

The jobless rate of 6 per cent would have fallen, except for a 0.2 percentage point rise in the proportion of people in work or looking for it – the participation rate now stands at 64.8 per cent.

In further good news, January’s employment figures have been revised up to a gain of 18,000 jobs, from a previous estimate of 3,700 positions lost.

However, despite the rise in full-time jobs, aggregate monthly hours worked fell 0.9 per cent in February to just under 1.61 billion.

The less volatile trend unemployment rate, which smoothes out month-to-month volatility, rose from 5.9 to 6 per cent.

Commonwealth Bank senior economist Michael Workman says the data belie high profile job losses, and show other parts of the economy are quietly gaining strength.

“A lot stronger than most people were expecting, so hopefully people will take that as a positive sign that you can have job losses that are extremely well publicised in manufacturing, and they are offset by job gains mainly in the services sector,” he told Reuters.


‘Noisy’ data

RBC economist Michael Turner agrees that detailed jobs data to be released next week will show a rise in employment in residential construction and retail.

“As ever, we warn that these data are noisy, and we strongly doubt the economy is growing quickly enough to be adding 65,000 jobs every two months (as has been reported for 2014 thus far),” he wrote in a note on the data.

“But the trend in the official employment data is at least now looking more consistent with the almost uniform improvement in indicators of hiring intentions over the past couple of months.”

Citi’s economists Paul Brennan and Joshua Williamson say some normal statistical changes had a significant effect on the ABS estimates for last month.

“The ABS says that in February the incoming rotation group had a higher proportion of employed persons, such that 37 per cent of the increase in total employment in the month was due to this new rotation,” they wrote in their note on the figures.

“If we apply this proportion to the seasonally adjusted employment result, it suggests that almost 17,600 of the 47,300 total gain was from statistical changes.”

The employment figures are based on a large monthly survey by the ABS and, as this article explains, are vulnerable to significant statistical variations.

The Australian dollar jumped more than half a cent on the data, rising to a high of 90.77 US cents straight after the figures were released at 11:30am (AEDT).

While the national news was positive, the data was not so favourable for Western Australia, where the unemployment rate reached its highest level since December 2003, at 5.9 per cent.

The rise in joblessness in the West was not due to a fall in jobs – an estimated 1,600 jobs were added last month – but rather a steep increase in the proportion of Western Australians in work or looking for it.

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