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Employment explodes - biggest monthly gain on record!; ABS 6202.0 - Labour Force, Australia, August 2014
Topic Started: 11 Sep 2014, 01:16 PM (10,429 Views)
Lef-tee
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I'm fairly convinced I know what didn't cause it - the biggest monthly jobs boom on record.
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peter fraser
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There is a long established tradition that goes something like -

"If the data is bad it must be true,

If the data is good it must be a lie or an error in the collection process"

We wouldn't want to change a long established tradition by thinking that the better numbers actually mean anything.
Any expressed market opinion is my own and is not to be taken as financial advice
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Mike
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peter fraser
11 Sep 2014, 02:23 PM
There is a long established tradition that goes something like -

"If the data is bad it must be true,

If the data is good it must be a lie or an error in the collection process"

We wouldn't want to change a long established tradition by thinking that the better numbers actually mean anything.
I agree.

The economy does have a lot of positive data just the media hype a few negatives which hides the true strength of the economy.

GDP numbers are good, could be better but far from negative. Leading indicators point to increasing GDP growth for the September quarter. Job advertisements up 8% and been trending up for some time now. Sooner or later it was going to appear in the employment figures.

It's the same in WA, media hype mining job losses when it is only a fraction of total employment. Employment growth is outpacing job losses and has been for some time, hence why we have a 5.0% unemployment rate. The truth is in the data, good or bad.
http://mike-globaleconomy.blogspot.com.au/
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A Lurker
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peter fraser
11 Sep 2014, 02:23 PM
There is a long established tradition that goes something like -

"If the data is bad it must be true,

If the data is good it must be a lie or an error in the collection process"

We wouldn't want to change a long established tradition by thinking that the better numbers actually mean anything.
We have the perfect situation here as the July numbers were far worse than expected and August numbers were far better than expected.

Therefore, bulls can call July an anomaly and bears can call August an anomaly.
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ThePauk
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Mike
11 Sep 2014, 02:33 PM
I agree.

The economy does have a lot of positive data just the media hype a few negatives which hides the true strength of the economy.

GDP numbers are good, could be better but far from negative. Leading indicators point to increasing GDP growth for the September quarter. Job advertisements up 8% and been trending up for some time now. Sooner or later it was going to appear in the employment figures.

It's the same in WA, media hype mining job losses when it is only a fraction of total employment. Employment growth is outpacing job losses and has been for some time, hence why we have a 5.0% unemployment rate. The truth is in the data, good or bad.
So that explains why the market is down today at 0.28% currently. Seems those in the market think the ABS numbers are BS, especially when the US and NZ was up.
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Dr Watson
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A Lurker
11 Sep 2014, 02:34 PM
Therefore, bulls can call July an anomaly and bears can call August an anomaly.
Others will simply declare, 'sample rotation'. And they would be right.
The trouble with the world is that the stupid are cocksure and the intelligent are full of doubt — Bertrand Russell
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goldbug
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ThePauk
11 Sep 2014, 01:28 PM
Mmmm.....

Employment increased 121,000 to 11,703,500. Full-time employment increased 14,300 to 8,094,300 and part-time employment increased 106,700 to 3,609,200.

So remind me again how many part time workers get mortgages?
It's the US model. We copied their dodgy IO and low doc loan models, their bullshit statistical manipulations, and now their system of sacking a highly paid worker and adding 2 low paid part timers instead. I suspect most of the jobs were in retail, that's the only industry that appears to be expanding. All based on cheap Chinese crap tools etc, and debt at the consumer end. It will last until GFCII probably.
Shadow was hopelessly wrong about the Gold Bull Market.
What else is he wrong about?
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Ollie
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The ABS labour force data for the month of August registered a sharp retracement in the headline unemployment rate to 6.1% from a 6.4% in July. The result beat analyst’s expectations of a 0.1% fall in the headline unemployment rate to 6.3%. In trend terms, unemployment rose to 6.2% in August – the highest unemployment since November 2002.

This is one of the strangest monthly employment releases that I have seen, with contradictions all over the place.

While the 0.3% fall in the headline unemployment rate represents a retracement from last month’s huge leap, and was somewhat expected, the gigantic surge in part-time unemployment (as well as overall employment) is curious in light of there being no change in the number of hours worked.

Personally, I don’t put too much weight on the seasonally adjusted numbers, which are subject to massive sampling error (see below table), making the results incredibly volatile and unreliable.

It’s better, therefore, to focus on the trend data, which registered a small increase in the unemployment rate to 6.2% but a rising trend. It also revealed that labour underutilisation is also on the rise, which together points to a softening labour market.

The one big positive from this release, however, is that the participation rate has improved significantly, reversing the downward trend that had persisted since early-2013.

As always, the mining cliff awaits, which along with the shuttering of the local car industry by 2017, will act as a stiff headwind to employment over the medium-term.

Total employment rocketed by a seasonally adjusted 121,000 to 11,703,500 in August. The increase in jobs was comprised of a 14,300 increase in full-time jobs and a 106,700 increase in part-time jobs. However, the aggregate monthly hours worked increased by only 0.1 million hours (less than 0.01%) to 1 ,609.5 million hours.

The participation rate increased by 0.4% to 65.2%, which is part of the reason why the unemployment rate only fell by 0.3%.

Total employment has leaped after this month’s curious surge in part-time employment. Growth in full-time jobs (1.0% YoY SA / 0.9% YoY Trend) also continues to improve, albeit still remains fairly soft.

Following this month’s reported part-time jobs boom, employment growth has surged and now appears to be fairly broad-based in seasonally adjusted terms, and unemployment rates have improved across the nation.

The state seasonally-adjusted figures are notoriously volatile and subject to a big margin of error. As such, the below chart shows the ABS’ trend unemployment rates, which shows Western Australia and New South Wales with the lowest unemployment (but with diverging trends), Tasmania and South Australia with the highest (but falling), and Victorian and Queensland unemployment also elevated (and rising). Note also that the national unemployment rate (6.2%) is also trending upwards.

A contradictory feature of this release is that the aggregate number of hours worked was basically unchanged (up less than 0.01%) in August, and has only risen by 0.6% over the year in seasonally adjusted terms, which is well below the circa 1.8% growth in the population. Moreover, the average number of hours worked remains near all-time lows.

Adding to the contradictory picture painted by this release, the labour underutilisation rate jumped to 14.3% in trend terms (14.4% seasonally adjusted), which is the highest labour underutilisation in nearly 16 years (since November 1998).

One big positive to come out of this release is that the participation rate has lifted sharply over recent months, even in trend terms, which would usually indicate that people are feeling more confident in their ability to find work.
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Perthite
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peter fraser
11 Sep 2014, 02:23 PM
There is a long established tradition that goes something like -

"If the data is bad it must be true,

If the data is good it must be a lie or an error in the collection process"

We wouldn't want to change a long established tradition by thinking that the better numbers actually mean anything.
some perspective perhaps?

http://www.watoday.com.au/business/the-economy/unemployment-drops-to-61-per-cent-20140911-10fal5.html

"an insane number"

Akin to the the US adding 1.5 million jobs for the month.
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Cool
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It is obvious the uptrend in unemployment from the GFC is broken, and we as of this month have broken a key level at 6.2%.

Should be a fast move to 5% next year, after that we will have to wait and see.

There are simply too many big drivers of jobs growth out there and the punters know it. Many industries are doing well and especially housing.

As much as I hate to admit it Australian housing is booming again and there is large scale investment in housing to drive jobs growth.
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