Friday, August 08, 2008
Macquarie Bank interest rate strategist Rory Robertson said the July figures, released yesterday, were a "waste of space".
And CommSec chief economist Craig James said anyone believing that full-time jobs rose by 53,700 and part-time jobs fell by 42,800 "probably also believes in the tooth fairy".
The Bureau of Statistics chose July to slash its monthly labour force survey by 24% as part of its effort to find $22 million of budget savings.
Until last month, about 54,400 people were asked about their employment position each month. Now it is 41,100.
Statistician Brian Pink said he had no option but to cut quickly "in order to maximise savings in 2008-09"...
The ABS has also abolished its quarterly vacancies survey, which was believed to be more accurate than the private newspaper and internet advertisement counts.
Treasurer Wayne Swan said the cuts were "entirely a matter for the statistician".
"He is independent. He adjusts his budget to suit his judgement," Mr Swan said. "Like everybody else, he has to work within his budget."
The ABS figures seemed to show full-time employment doing one thing, part-time employment another, total employment up 10,900 and the national unemployment rate unchanged at 4.3%.
Mr Robertson queried whether the figures reflected the facts. "Given the uncertain effects of the crazy cost-cutting shift to a new one-quarter smaller survey sample size, the bureau's monthly jobs data now are a waste of space for economy-watching purposes, today and for the next several months at least," he said.
"We have no way of knowing anything about the news-to-noise ratio in the report."
The ABS' "trend" figures show that full-time employment fell in only one state, Victoria, last month, just as it had fallen there over the previous six months.
Victoria lost 1500 full-time jobs in July, and has lost 16,200 since January. The other states have gained jobs.
Victoria's total employment is better than the full-time numbers indicate, suggesting a "hollowing out" of jobs in the state as full-time jobs have vanished and been replaced with part-time ones.
Victoria lost 300 jobs last month in trend terms, and 2200 over the past six months.
NSW joined Victoria in losing jobs in July, shedding 3400 - all of them part-time.
Earlier in the year, NSW was enjoying something of a recovery, gaining jobs at a rate approaching that of Western Australia and Queensland.
The latest figures - if correct - show that the NSW jobs market is again becoming more like Victoria's. South Australia's trend employment increased 1200 last month, moving in the same direction as Queensland and Western Australia, whose jobs totals jumped 5600 and 3100.
Victoria stands alone in losing full-time jobs
VICTORIA has emerged as Australia's employment basket case with the latest figures showing it lost 16,200 full-time jobs at a time when every other state was gaining jobs.
The labour force figures for July show that since the start of this year Australia has gained an extra 74,300 full-time jobs in trend terms with Queensland responsible for 48,900. Western Australia gained 23,100, and even the more poorly performing states of NSW, South Australia and Tasmania gained 21,700, 8000 and 4300.
Victoria stands alone in losing full-time jobs - 1500 of them in the past month. At 4.6%, the state's unemployment rate remains stubbornly above the national average of 4.3%.
Opposition Leader Ted Baillieu said the news showed that Victorian business leaders were losing faith in the state.
"We have had announcements of job losses at Don KRC Smallgoods, Dartmoor Sawmill, Ardmona in Shepparton, the Somerton tyre factory and even the Government's own Department of Primary Industries," he said.
Federal Treasurer Wayne Swan welcomed the national figures, saying they showed evidence of strength as Australia faced "the most difficult global economic conditions in 25 years".
Australia's national unemployment rate remained steady at 4.3% in July while an extra 10,900 Australians found jobs.
But the make-up of the change was unusual with the figures suggesting that full-time employment climbed by 53,670 while part-time employment dropped 42,800.
The Bureau of Statistics warned that the July figures would be less reliable than in the past as it had cut the size of its survey by 24% to cope with budget cuts.
However, it said the smoothed or "trend" estimates would remain reliable.
Economic analysts had another reason for treating the July result with suspicion, saying it was a reflection of conditions up to four months ago.
"It takes employers around four months to hire new staff - from advertising for positions, to interviews, and then to the first day of a new job," said Commonwealth Securities economist Savanth Sebastian.
"These figures highlight the much better economic conditions noted earlier in the year.
"There has been a change of scenery in the last couple of months. Domestic demand has deteriorated. Retail trade, consumer sentiment and business confidence have all fallen by the wayside.
"Employers are attempting to shore up profitability by controlling costs, and with labour costs effectively a large component of any business, employment is likely to weaken in coming months."
Asked whether he thought the buoyant national employment result would encourage the Reserve Bank to wait before cutting interest rates, Mr Swan said that was entirely a matter for the bank.
But he said that when the bank did begin to cut rates, he would expect Australia's private banks to follow it down.