Interest rate cut postponed, perhaps indefinitely — check back again in June, July or August? That might be the call from the commentariat this afternoon as they digest what was a surprisingly positive March employment report from the Australian Bureau of Statistics this morning (Chris Caton might get the crystal ball award, forecasting a rogue strong result this morning).
Certainly the punters in the forex market reckons its a case of rate rise postponed, perhaps for a while, if not indefinitely, after they chased the Aussie dollar up nearly half a cent in a matter of minutes after the jobs report was released at 11.30 am. But the stockmarket fell back from a string 1% plus opening as the market realised another rate rise could be a long time happening, if at all.
The ABS said the jobless rate dipped to 6.1% in March from a revised 6.2% for February (6.3% originally reported). That was a fall of less than 0.1% in seasonally adjusted terms, and the unemployment rate was unchanged at 6.2% in trend terms. The seasonally adjusted rate was 6.4% in January, so there’s a small improvement so far in 2015. More to the point, more than 37,000 new jobs were created in March — over 30,000 full-time, according to the ABS, with a total of 11.720 million people employed in March. The market had been looking for 10,000 to 15,000 (as usual) extra new jobs. The seasonally adjusted labour force participation rate increased to 64.8% in March, from 64.7% in February, which is another small positive.
The good result was driven by a 0.2 point drop in unemployment in NSW to 6%, off the back of a higher participation rate. Victoria was up 0.2 points to 6.2% off higher participation; Queensland was flat at 6.6% despite a fall in participation of 0.4 points. South Australia had a good result — unemployment down 0.4 points to 6.4%, despite a 0.3 point rise in participation; WA was flat at 5.5%, and Tasmania up a little to 6.6%.
The ABS said the seasonally adjusted aggregate monthly hours worked series also increased in March, up 4.8 million hours (0.3%) to 1,630.4 million hours. And the seasonally adjusted number of people unemployed dipped by 1,500 to 764,500 in March, which was also positive.
Employment data is a lagging indicator — so the pick up since the start of the year has been in train for some while, and not just from February when the RBA surprised with a rate cut — but that influence can’t be discounted totally. The March jobs report continues the tantalising series of official and industry reports this month showing improving or solid car sales, building approvals, retail sales, housing finance and business conditions and confidence. In fact the March quarter is starting to shape up a bit stronger than it seemed a month ago — just as the March 2014 quarter did, thanks to booming iron ore sales. That quickly disappeared in the remainder of 2014 and growth slowed. So far this year iron ore volumes have held up, but prices have collapsed, and its been solid performance by domestic activity — household spending and especially the home building sector, which have supported the economy.
Then again, jobs figures from the ABS can be notoriously unreliable. The Bureau says it has sorted out the problems which affected the series’ reliability in the past one to two years, but it will take a few quarters to feel comfortable with them again.
Crikey is committed to hosting lively discussions. Help us keep the conversation useful, interesting and welcoming. We aim to publish comments quickly in the interest of promoting robust conversation, but we’re a small team and we deploy filters to protect against legal risk. Occasionally your comment may be held up while we review, but we’re working as fast as we can to keep the conversation rolling.
The Crikey comment section is members-only content. Please subscribe to leave a comment.
The Crikey comment section is members-only content. Please login to leave a comment.