Australia: No strength in labour market - TDS

Australia’s employment jumped by +39k (TD +35k, mkt +17.5k) and all in full-time, apparently but this ‘strength’ is entirely due to seasonal adjustment not capturing recent employment trends, and the markets should ignore it suggests analysts at TDS.

Key Quotes

“As the participation rate picked up from 64.4% to 64.6%, the unemployment rate added a pip to 5.7%, back to July levels.”

“Full-time employment may have recovered a little in Oct/Nov, but at –0.3%/yr, is tracking well below that suggested by a range of labour market vacancy series.”

“After the surprise hawkish tone of the FOMC overnight the market’s focus should not be on this report. AUD remains heavy at a little over $US0.74, keeping a firm eye on EUR trends for now.”

“Full-time hours worked are shrinking, and so it is difficult to construct a case for a pickup in wage inflation and overall inflation in Australia in the near term. Adds to our conviction for a lower AUD and steeper ACGB curves.”