Australian labor market likely quite in August

Australia's July's labour market report surprised in just about every aspect, with large moves in all key measures.

"We expect the August report to reverse a substantial part of these changes, as we believe sample rotation had a great deal to do with the erratic moves. Employment, which surged 38.5k (equivalent to an annualised rate of 4.0%), is likely to have declined: we expect a 12k decrease, which would leave the Q4 figure on course for an annualised gain of 1.9%", says Societe Generale. 

The underlying civil population 15-years and older is growing at just 16k per month at current rates of participation, so this was really an expansion of epic proportions. The participation rate would thus reverse 0.25pp of the 0.32pp increase in July. This would allow the unemployment rate to decline from 6.3% (6.349% unrounded) to 6.2%, supporting the view that the trend in unemployment has indeed stabilised, added Societe Generale.