Australia's Labour Force Survey for September is due today (1130 AEDT). The report returns to its usual slot on the third Thursday of the month, after recent releases were delayed while the ABS overhauled the series. A strong upside surprise for employment (39.5k) in August was unable to prevent the unemployment rate rising to 4.6%, its highest since late 2021. While acknowledging that conditions have eased, the RBA still regards the labour market as a little tight and broadly consistent with its full employment objective. Expectations are that employment will rise by 20k in September, holding the unemployment rate at 4.6%. Pricing for one further RBA hike this year sits below 50% going into this report.
September preview: Markets on watch as ABS completes survey overhaul
Markets are sitting on the fence, forecasting employment to increase by 20k (range: 0-35k) and the unemployment rate to remain at 4.6% (range: 4.5-4.7%). This is an understandable position given the usual volatility in the series while also considering that the ABS is rolling out the report for the first time since completing the overhaul of the survey's collection methods and questionnaire. The ABS has been working up to this point after gradually implementing these changes over recent months - though the methodologies used to generate the headline employment and unemployment figures remain the same.
August recap: Unemployment rate rises despite solid employment growth
The unemployment rate touched fresh highs since late 2021 after rising to 4.6% in August from 4.5% in July. That came despite employment increasing by a net 39.5k in the month (part time 45.8k/full time -6.3k), nearly double the consensus forecast (20k) and a strong rebound from July's surprise 15.9k decline. For the 3 months to August, employment gains averaged 34k per month, the strongest momentum since February.
Even with the fairly strong employment outcome, it was not enough to outpace the increase in the labour force (67.7k) as the participation rate rose from 66.9% to 67.1%. That saw the unemployment rate rise from 4.5% to 4.6%. However, the broader underemployment rate declined from 6.3% to 6.2% as hours worked (0.8%m/m) posted their fastest rise in almost a year. That held total labour underutilisation to an unchanged 10.8%.
