Pete Wargent blogspot

CEO AllenWargent Property Buyers, & WargentAdvisory (institutional). 6 x finance author.

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Thursday, 16 March 2017

Icarus rate hikes melt in the sun

Sand in the gears!

There had been some talk of interest rate hikes recently, but although most forecasting houses remain relatively upbeat today's job figures 'threw some sand in the gears' (to use the parlance of the day).

Employment decreased in February by 6,400 to 11.999 million.

Admittedly, the composition was better with full time employment up by 27,100, while the trend result for employment rose by 11,600 to beyond 12 million. 

But still, an underwhelming result that missed market expectations. 

Over the past year the growth in employment has slowed to 104,600 or 0.9 per cent. 

The seasonally adjusted unemployment rate jumped to 5.9 per cent, which was also a miss and the highest rate in 13 months. 

In seasonally adjusted terms, hours worked are lower than a year ago, down by 0.5 per cent. 

A more sanguine review of the numbers might say that they are a setback rather than anything more alarming, with total hours worked a modest 1 per cent higher over the year. 

Other indicators such as surveys on business conditions and job advertisements have been much more bullish than this, but the labour force survey begs to differ, at least for now.

Resources states still weakening

The best performing state of late from an unemployment rate perspective has been Tasmania.

Disappointingly, there were lifts across the board in underemployment, underutilisation, and youth employment in February. 

In terms of underutilisation, the two southern states have shown a marginal improvement, while the resources states have deteriorated as resources construction projects draw to a close. 

The headline numbers for Western Australia have been somewhat improved, but in reality the seasonally adjusted underutilisation rate continues to rise to its highest level since August 1993.

While Sydney was the king of jobs growth in recent years, Melbourne has well and truly taken over that mantle of late, with regional Queensland, Western Australia, shedding jobs.