Australia's labour force survey for November is due to be published today at 11:30am (AEDT). After the Delta lockdowns hit the labour market hard through the winter and into spring, reopenings backed by high levels of vaccination now have a strong rebound in train. Employment is expected to have surged back in November, while the easing of restrictions should also see many people coming back to the labour force.
As it stands | Labour Force Survey
Employment continued to fall in October with a 46.3k decline posted for the month. This came against the market consensus for a 50k rise and took the fall in employment through the Delta lockdowns to 333.7k. Much of this fall in employment has been in the part time segment (-250.3k), but in October the full time segment drove the headline fall (-40.4k).
Hours worked nationally were broadly steady on the month (-0.1%m/m) around varying lockdown impacts. New South Wales (3.9%m/m) continued to rebound as restrictions were easing, though with Victoria still locked down hours worked in the state fell further (-4%m/m). Total hours were 2.1% below pre-pandemic levels in October reflecting large falls in New South Wales (-5.2%) and Victoria (-7.1%). Hours worked across the rest of the nation were 3.3% above pre-covid levels.
With many people starting to return to the labour force in New South Wales, the national participation rate posted its first increase since May lifting from 64.5% to 64.7%. This is well down on its level of just above 66% before the Delta lockdowns. Participation in Victoria continued to fall as the state's lockdown continued.
October's fall in employment and rise in participation saw Australia's unemployment rate rise sharply, from 4.6% to 5.2%. Broader measures of spare capacity continued to increase as underemployment lifted to 9.5% and underutilisation hit 14.7%.
Market expectations | Labour Force Survey
Today's report reflects post-lockdown conditions with employment forecast to surge by 200k on the median estimate (range: 150k to 280k). This is expected to drive a decline in the unemployment rate from 5.2% to 5.0% (range: 4.7% to 5.5%), with the outcome to a large extent hingeing on the response from the participation rate to reopenings.
What to watch | Labour Force Survey
After the October report disappointed expectations heavily, risks are skewed to an upside surprise on the employment outcome today. Since the survey period in October, the ABS's high-frequency payrolls index has surged by around 3% driven by New South Wales (4.4%), Victoria (4.9%) and the ACT (6.9%) coming out of lockdown. Backing this up, the employment index in the NAB Business Survey for November lifted sharply over the month to +11 from a +6 reading. The participation rate is also of strong interest today with a lot of ground needing to be made up to get back to the levels seen prior to the Delta setback.
