Australia's latest labour force survey is due to be published today at 11:30am (AEDT) covering the month of September. The nation's labour market defied market expectations in August as the recovery in employment continued through an increase of 111.0k against the median estimate for a decline of 35.0k. Meanwhile, the unemployment rate rolled over from a 22-year high of 7.5% falling to 6.8%, whereas it had been expected to lift to 7.7%. Markets are looking for these outcomes to partially reverse in today's report.
As it stands | Labour Force SurveyEmployment increased by a net 111.0k in August following on from the gains in June (227.8k) and July (119.2k). In total, a little more than half of the 871.5k jobs that were lost during the national shutdown have now been recovered. In August, the gain was led by the part-time segment (74.8k), though the recovery in the full-time category appeared to be establishing some momentum as it put together its second consecutive monthly gain (36.2k). The impact of the reversal of Victoria's reopening was evident through a decline in employment in the state of 42.4k against gains elsewhere across the rest of the nation. A special note from the ABS attributed the strength in national employment in August to self-employed workers.
The nation's unemployment rate declined unexpectedly as it fell from 7.5% to 6.8%, while underemployment was unchanged at 11.2%. This occurred alongside a small uptick in the level of workforce participation from 64.7% to 64.8%, albeit still well below its pre-pandemic level at around 66%.
The recovery in hours worked stalled in August (0.1%) as the impact of Victoria's shutdown (-4.8%) offset increases across the other states. This came after increases in total hours worked nationally of 4.2% in June and 1.3% in July. This now leaves hours worked down by 5.4% compared to their pre-pandemic level in March. A full review of the August report is available here
Market Expectations | Labour Force Survey
In today's report, markets look for weakness to come through. The median estimate is for employment to fall by 40k, though this is a low conviction call given the range of estimates sits between -90k to +100k. While it proved to be a poor guide last month, the ABS's weekly payrolls data showed a fall in the employment index of 0.7% (non seasonally adjusted) over the reference period covered by today's report. The unemployment rate is forecast to partially unwind its improvement in August lifting from 6.8% to 7.0%, with the range between 6.5% on the low side to 7.5% on the high side.
What to watch | Labour Force Survey
Amid the volatility in the data and with the Victorian economy still in shutdown mode, the best indicator of activity in the labour market continues to come from the hours worked measure. The state detail is also of importance, not only in Victoria, as it will show how the progressive recoveries in each state are faring.
