Friday, September 12, 2008
The unemployment rate fell from 4.3% to 4.1% in August as an extra 14,600 Australians found new jobs, half of them in Victoria.
The official figures suggest that an extra 8,659 Victorians found jobs in August, more than reversing the slide of 7,880 in the previous six months.
But the are less reliable than in the past...
The Bureau of Statistics has warned that monthly changes in the state totals are subject to greater than usual margin of error as a result of its decision to cut the number of households it surveys by 24%.
The nationwide boost in employment – the 13th in 14 months – will be treated as a mixed blessing by the Reserve Bank.
“The jobs market is likely to soften in coming months, but at the current time its clearly in great shape,” said CommSec economist Craig James.
“The Reserve Bank will no doubt be restrained in its celebrations, worried that the tight conditions could drive up wages. It certainly doesn’t need to be in a rush to cut interest rates.”
JP Morgan economist Stephen Walters agreed, saying the news showed that the Australian economy was “not, after all, on its knees”.
“It is not in urgent need of resuscitation. We expect the Bank to delay the next rate cut until December.”
BT economist Chris Caton said the news was consistent with this week's reports of a rebound in consumer confidence and retail sales.
“This doesn't mean that things are rosy; only that there is no reason to use that other “R” word – recession,” he said.
“There almost certainly are more rate cuts in the pipeline, but the chance of one next month is now less than 50%.”
Every state other than NSW and South Australia recorded an increase in jobs last month. NSW has by far the worst unemployment rate in the nation at 4.9%. Victoria's has improved from 4.6% to 4.3%. Western Australia has the lowest unemployment rate in the nation at 2.8%.
The Treasurer Wayne Swan described the employment figures as “solid” and said he was confident that the Bureau of Statistics cutbacks had not made them inaccurate.
“I rely on the accuracy of the Bureau like everyone else does, and the statistician vouches for these figures. So I think people can make up their own mind,” he said.
But Westpac economist Anthony Thompson said the cutbacks had made the figures much less reliable.
While the Bureau of Statistics reported that the total number of Australians with jobs had increased by a seasonally adjusted 16,600 he could only be confident that the true result was somewhere between a slide of 45,800 and and a increase of 120,800.
“The month by month changes are volatile and noisy,” he said.
Employment growth has slowed to 12,200 per month this year from 21,900 per month last year.
Most of the new jobs are being created in mining and farming, with employers in construction, retail and manufacturing industries shedding jobs.