Australia's monthly Labour Force Survey is due to be published by the ABS today with the October report coming through at 11:30am (AEDT). Conditions in the labour market were broadly unchanged in September with the strong recovery achieved coming out of the pandemic consolidating over recent months. In October, employment is expected to have lifted sufficiently to hold the unemployment rate around half-century lows at 3.5%. Seasonal factors associated with holidays over late September into early October could impact today's report.
As it stands | Labour Force Survey
Employment has surged coming out of the pandemic rising by 5.4% over the past year. Over recent months the momentum has slowed as the labour market has tightened. In September, employment was broadly flat (0.9k) missing expectations for a rise of 25k and was little changed over the third quarter (0.5k). In the month, full-time employment lifted by 13.3k but was largely offset by a 12.4k fall in part-time employment.
The national unemployment rate held at 3.5% in September, remaining close to half-century lows. Participation was also steady in the month at 66.7% and is close to record highs. Spare capacity (total underutilisation) in the labour market saw a modest increase in the previous report to 9.6% but is at lows going back to the early 1980s. The underemployment rate was steady at 6.0%, a level that went unmatched in Australia throughout the duration of the last cycle dating back to the financial crisis.
Hours worked were flat in September, in line with the employment outcome. Activity continues to be hampered by Covid-related and seasonal factors; the number of Australians working fewer hours than usual was more than 2 million in September. Absences related to illness were down from the peaks of the pandemic but still historically elevated. Nevertheless, hours worked in September were almost 5% above their pre-pandemic level.
Market expectations | Labour Force Survey
In today's report, the median estimate for employment is for a rise of 15k, with individual forecasts in the Bloomberg survey ranging from -3k to 45k. The unemployment rate is forecast to remain unchanged for the third month in succession at 3.5% (range: 3.5% to 3.6%).
What to watch | Labour Force Survey
Volatility related to Covid and seasonal factors has been prevalent in the data through 2022 and another wildcard could emerge in the October report. The ABS's high-frequency payrolls data tracking employment softened into the early stages of the month before picking up towards the end of the survey reference period. This could reflect increased levels of annual leave alongside mid-semester school holidays. Between late September and early October, there were also a higher-than-usual number of public holidays. This included the national day of morning for Her Majesty Queen Elizabeth II and the holidays observed in certain states around the domestic football grand finals.
