Massive skepticism following great jobs report
At 11 am Sydney time yesterday the Australian Bureau of Statistics released the October jobs report. It showed 58,600 new jobs, most of them full time.
From 11:00 am to 11:01 am there was excitement and optimism but the following 20 hours have been pure skepticism.
This was the typical reaction from economists.
"Apparently an economy growing well below trend, with a post-China slump in mining and no sign of inflationary pressures, saw unemployment plunge 3 ticks to 5.9% and employment leap 58.6K in a single month - the equivalent of 783K jobs added on a US payrolls survey!"
The reaction has been to combat a hyperbolic number with hyperbole.
Sydney Morning Herald's economics editor Peter Martin is out with a similar take where scoffs at the number and breaks it down to say it was one hiring "every ten seconds for 20 working days" in October.
Australian jobs with 6-month moving avg
The reason there is so much skepticism is that the Australian Bureau of Statistics has had a series of missteps over the past year, especially with the jobs report.
But lets take it down to what the real headline should be:
Australian jobs not as strong as advertised, but still surprisingly strong
Martin buries the lede of story near the end.
"The gross flows show a genuine jump in employment in October, but one only half as big as the one published.
Around half of that figure of 58,600 newly-employed workers appears to have been a statistical artifact, caused by a difference in the type of households that left the survey and the type that joined.
But that still means half of the jump was probably genuine."
That's still good news, will keep the RBA sidelines and will (at some point) underpin the Australian dollar.
