A record 121,000 people joining the workforce in one month is probably a statistical quirk that will be followed by a big drop in September.
If you think a record 121,000 people joining the workforce in one month is unbelievable, you’re probably right.
Official data also showed the jobless rate tumbling to 6.1 per cent in August after an equally-surprising jump to a 12-year high of 6.4 per cent in July.
The truth, probably, is somewhere in between.
Whatever, Employment Minister Eric Abetz believes that while the unemployment rate starts with a six, the government has more work to do.
“We as a government know that we need to do a lot as a nation to drive that figure down,” he told reporters in Melbourne on Thursday.
Shadow treasurer Chris Bowen said any fall in the unemployment rate was welcome, but the latest jobs figures have been volatile over recent months.
Which means you have to be wary of one month’s figures.
“The trend however, is pretty clear,” he told the National Press Club in Canberra on Thursday, noting the unemployment rate was 5.8 per cent when Labor lost office in September 2013 compared with 6.1 per cent now.
Macquarie Research economist James McIntyre is highly dubious of the jobs figures, which also included a jump in the participation rate to its highest level in more than a year.
“Today’s data does not help anyone who is trying to discern what’s going on in the Australian economy,” he said in a note to clients.
Changes to the way the Australian Bureau of Statistics collects its data has been cited as key a factor behind recent sharp movements in the jobs figures.
Economists believe it may take a while to get a true picture of the jobs market.
However, rising employment would be consistent with leading indicators, such as job advertisements.
But uncertainty over the status of the labour market means the Reserve Bank won’t be rushing into raising interest rates.
TD Securities head of Asia-Pacific Research Annette Beacher noted the previous out-sized gains since the labour force series began in 1978 – 103,000 in August 1991 and 95,000 in November 1985 – were both followed by a fall of around 30,000 in the following month.
She has pencilled in a 25,000 drop for September.