Unemployment Numbers

Previous: 4.1%
Consensus: 4.0%
Actual: 3.7%

This is a very significant drop that somehow everyone got wrong.

May indicate rate cuts are going to be further down in the horizon than expected, especially if inflation remains sticky in the USA at this ~4% level.

I can't see the RBA cutting rates when unemployment is practically at all time historical lows.

 

keep in mind though, that to be considered unemployed, people need to be actually looking for work.

so the low number in itself might just mean that a lot of people stopped bothering looking for work again.

need to look at other employment data to see what's happening.

it seems that in this instance we had 116,000 extra people getting employed, so yeah.... looks like the mass layoffs the doom and gloomers are talking about aren't that "mass" after all.

i don't think unemployment figures alone will be what RBA makes their decision on.

it doesn't matter how many people are employed, if they aren't spending the money in the economy.

 

Low unemployment is inflationary. Unemployment on it's own won't be the single factor, but the flow on effects to inflation will be.

Can't have low unemployment and a decrease in inflation, it just doesn't happen.

 

Careful of seasonally adjusted numbers and the old "X doesn't move in a straight line"

Ups and downs but trajectory is clear - Will become clearer (obvious) by mid year.

 

really? what about the whole of last year?

 

We just had a decade or more when inflation was benign and unemployment was low? Unemployment is a statistic, and limited as all statistics are.

 

Immigration and unemployement are a bit self supporting. Unemployment is higher that it appears. Many people want more work but cant get it. Unemploymnet excludes them from the numbers and doesnt count new arrivals despite them chasing jobs. They have to be here and looking to be counted. In the three months ended Sept 23 145,000 have arrived.

The inflationary bit I have concerns with is with the fully employed. NSW Firefighters and Airport workers want 20-25% increases. 23% for age care workers. CFMEU wants 26%. NSW Public sector wants 20% PLUS. Nurses still havent been negotiated by expect 15-20%. Electrical trades unions (power workers) want 24%

 

I can't see any medium term rate cuts either outside of some sort of global shock/crisis.

Sure, inflation has tamed but its still outside the target range and I wouldn't be surprised if it proves stubbornly difficult to get from circa 4% to below 3%.
Personally I expect where we are to be the new norm for the next couple of years.

Given that the most focused minds in the business can't predict these things I don't have a strong conviction in my opion, but the talk of cuts seems to come most vocally from the mainstream media - almost on the assumption that what went up must now be due to come down.

 

YouTube

There is definitely a lag but I think it will happen and will happen quickly when it does.

Cheers,
Oracle.

 

Insights into job attachment, January 2024

ABS notes the job surge in February stemmed from a larger than usual number of people in December and January who had a job that they were waiting to start or return to, and had therefore been considered unemployed. Probably those who decided to take a longer than usual summer holiday.

 

If those go through....unemployment will rise significantly...only people who deserve them are aged care workers and nurses.....

 

Patience.

 

Very strong print - it makes a bit more sense when compared to the past 3 months and aggregated together, which is how most of the data experts note to read employment prints (too volatile month to month). One or two of them were atrocious, combined together they are showing a slowing jobs market but not one shaking out ominously.

Shows labor market is strong, but still weakening. That weakening is required, expected and planned for, and largely on track overall.

Forward leaning data shows the gradual tick up in unemployment likely to continue.

And the headline unemployment number does look a little better without context. The actual number of unemployed people is up a fair bit over the past 3-6 months, with a 0.5% decline in the participation rate over the time period making the unemployment number itself appear good.

I.e. a 3.7% unemployment rate mid last year was a stronger labour market than a 3.7% unemployment rate today (fewer people unemployed, and more % people participating then).

IMO RBA should be smiling. Theyve tightened, jobs market is still very good, households and economy is slowing....their narrow path is going as planned.

 

That's me
Bugger going to work up to my elbows in poo for $30.20 an hour !

 

The 2 percent target widely adopted by central banks today originated from New Zealand, and surprisingly it came not from any academic study, but rather from an offhand comment during a television interview. During the late 1980s, New Zealand was going through a period of high inflation. In 1988, inflation had just come down from a high of 15 percent to around 10 percent. New Zealand’s finance minister, Roger Douglas, was pressed during a television interview about whether the government was satisfied with the now lower—albeit still high—level of inflation.

The History and Future of the Federal Reserve’s 2 Percent Target Rate of Inflation | Council on Foreign Relations

 

It doesn't really matter... The primary job of central banks is to CREATE inflation - Just not too much of it. Actually, creating inflation is harder than people might think, outside stagflation/hyperinflation. Whether it's 2%, 3%, 4% doesn't really matter - It just needs to be a positive number, and low. Inflate away - But minimize volatility.

CPI is a garbage indicator anyway - The weightings, weighting changes, just skew/distort price changes over time. Still, it's better than nothing. The point is just there be a target that is positive, relatively low, and the composition of which doesn't change too much over time.

Just as the central banks and economists got it wrong with projections coming out of covid, they're getting it wrong again now. Back to the mean we go, pre covid - Struggling to create growth and inflation. Our economies have not changed. Some temporary arithmetic just created temporary distortion. Said another way - Free money showered upon the earth during a time of servery disrupted supply chains, was always going to bring about inflation - But was always going to be transitory.

 

Something to be mindful about employment data is that the rba determines it by rolling sample populations that change month to month, then extrapolated across the total population. This means swings one month to the next May be clouded by employment of the population sample. Not to say it isn’t a genuinely strong result, but there is a probability that the magnitude is overstated due to the sampling methodology.

I’d wait for two consecutive periods of strong improvement before getting too excited.

 

Double pay when it rains, $1000 a week travel bonus - Queensland tradies reap rewards of astonishing new pay conditions

 

i feel like i should switch careers