Employment falls 41k
Employment fell sharply by -40,900 last month, missing market expectations significantly, and another signal that the economy is beginning to roll over.
There were some big swings in the sample rotation figures, and there will be another significant change next month, so there's clearly some volatility in the monthly numbers to be taken into account.
The employment declines were experienced across each of the three most populous states, although New South Wales still has growth in total employed persons of +144,000 over the past year, and quarterly employment growth remained positive on a national basis.
Big drop in participation
The participation rate suddenly dropped in July from 66.8 per cent to 66.4 per cent.
I'm not going to pretend to understand such a sharp move in a single month, except to acknowledge that school holidays (and now the ability to take international holidays) have wreaked a bit of havoc with the payrolls figures of late.
As an indirect result, the unemployment rate fell to a new cycle low of 3.38 per cent.
At face value that means there was a marked decline in the number of unemployed persons from 493,900 to 473,600, meaning in turn that there are apparently more jobs vacancies (480,000 in May) than unemployed persons.
I could be off track, but it appears to me that the number of persons available for work is now set to increase quite dramatically as new arrivals surge into the summer months, while the most timely available jobs vacancies data series from ANZ and the Skills Commission are both now falling.
It had quite reasonably been expected that average weekly ordinary time earnings would accelerate, but...nah, in the event the figures were rubbish.
Mr. Macro at the carpet store underscores the dichotomy.
The wrap
Overall, this week's data dump has broadly suggested that the central bank should cool the proverbial jets, with weak wages and average hourly earnings figures, a huge surge in overseas arrivals, and a big monthly drop in total employment.
Yes, this is only one month of job declines, but the economy is going to need to generate consistent jobs growth as labour supply returns.
There may yet be a case for a 40 basis points interest rate hike next month, roughly splitting market pricing and bringing the cash rate target to a 'neater' round figure of 2.25 per cent.
Whatever, we appear to have moved one step closer to the pause.
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You can read the detailed analysis of the release with James Foster here.
