Employment revised up
The labour force figures today released for November solved one conundrum, which is why jobs growth had apparently stalled despite record high jobs vacancies a few months ago.
The simple answer is that actually employment growth hadn't stalled, and the ABS revised back in an extra +87,000 employed persons from May to October.
Employment increased by a further +62,000 in November, up to a record high of 13.77 million, largely driven by an increase part-time employment over the month.
The number of unemployed persons increased by +7,400 to 492,000 but this wasn't quite enough to see the unemployment rate lift back up to 3½ per cent.
In fact, the unrounded figure was 3.448 per cent...so close!
Monthly hours worked declined, but that followed a strong month in October, and overall underemployment/underutilisation measures remained tight.
In the US futures markets see the Federal Reserve lifting the funds rate close to 5 per cent, before cutting rates hard in the second half of 2023, and into 2024.
Australia is in a slightly different situation.
While the US has seen participation rates way down on their pre-COVID levels, Australia's participation rate has surged to an all-time high of 66.8 per cent, driven by record female participation.
There's every chance that the unemployment rate lifts quite quickly next year, therefore, and we don't have runaway wage price growth (it's only running at about 3 per cent, and may lift to about 4 per cent).
Australia also still has a huge chunk of its labour force calling in sick, with over half a million people working reduced hours in November.
As and when this COVID wave passes, that's a lot of extra heads likely to be seeking more hours.
What has driven the record participation rate in Australia?
Probably cost of living concerns and declining household wealth have encouraged more part-time work and more people working second jobs.
At the state level great outperformer has been New South Wales, which saw its unemployment rate drop as low as 3 per cent in October, and continues to add jobs at a rollicking pace, with +81,000 over the past quarter.
Overall, this a strong result which keeps the unemployment rate down at around 3½ per cent for now, though economists do expect the economy to slow sharply in 2023 while the working age population is soaring.
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ANZ reports spending losing momentum as rate cuts and the cost of living bite.
