Australia’s labor market likely to have strengthened in September

Australia’s labor market report for the month of September is expected to show strength in nearly all respects, following two weak reports. According to a Societe Generale report, employment is expected to have risen by around 20,000, which is equivalent to an annualized rate of 2 percent. There appears to have been a balanced growth between full-and part-time jobs. In the prior three months, alterations in full-and part-time jobs had opposite signs all the time, so that, lower than the total employment figure, the signals were usually quite different from the headline print, stated Societe Generale.

In July, total employment had risen decently by 26,000; however, reported full-time jobs dropped by 43,000, whereas part-time jobs increased by 70,000, implying that in full-time equivalents, employment might have dropped. Similarly, full-time jobs in August increased 11,000 but part time employment fell 15,000. The headline print of -4k was misleading, even if full-time equivalent employment was possibly weak.

Growth in hours worked has definitely decelerated below that of employment. Apart from continued reasonable, and labor-intensive, growth in output, statistical factors also imply a robust report, noted Societe Generale. A rise of 20,000 in employment would pull up the year-on-year employment growth rate to 1.7 percent from 1.5 percent.

“Despite the expected strong employment gain, we expect unemployment to have inched higher – though not by enough to push the unemployment rate above the rounding point to 5.7 percent - as the participation rate will in our view reverse part of the 0.16pp decline recorded in August”, added Societe Generale.