Australia's Labour Force Survey for November is on the docket today (11:30am AEDT), the final major domestic data point to be released in 2024. Markets are running two-sided risks into the report after pricing in an earlier start to RBA rate cuts - potentially as soon as February - following a dovish pivot from the Board at this week's meeting. Another soft employment outcome on the back of October's underwhelming rise could give further momentum to February cut trades. By contrast, a strong rebound in employment could see easing expectations wound back.
November preview: Employment outcome key after October moderation
The key question around today's report is whether the moderation in employment to a 15.9k rise last time out - the first downside surprise in 7 months - proves to be a one-off or if another subdued figure prints. If it is the latter, markets may take that as a sign that the resilience in employment to slower economic growth is starting to fray with the surprisingly soft Q3 GDP growth figures (0.3%q/q, 0.8%Y/Y) reported last week still clear in the memory. Markets appear reluctant to call it one way or the other. The median estimate is for employment to rebound to a 25k rise around a wide band of estimates of 15-50k.
The national unemployment rate is forecast to tick up to 4.2% in the month (range: 4.1-4.2%). As has been the case throughout much of the year, a modestly higher unemployment rate won't necessarily concern the RBA if employment is still rising at a solid pace and labour force participation remains around its current record high levels.
October recap: A rare downside miss for employment
Employment missed to the downside of expectations for the first time since March rising by a net 15.9k (FT +9.7k, PT +6.2k) against the 25k consensus. This marked a moderation from the run of solid increases over recent months. In the September quarter, employment gains averaged 52k per month.
Although employment fell short of expectations, the national unemployment rate remained steady at 4.1% for the third month in succession as labour force participation eased from record highs (67.2%). The broader underemployment rate continued to tighten printing at 6.2% in October, its lowest level since April 2023 and down from a recent high of 6.7% in May. Total labour force underutilisation remained at a multi-month low of 10.4%.
A slight uptick in hours worked in October (0.1%) saw annual growth firm from 2.4% to 2.5%, its fastest pace since September 2023. Average hours worked per month have been steady at around 136 hours since May.
