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Softer-than-expected Australian employment report - ANZ

FXStreet (Bali) - A softer-than-expected Australian employment report was seen today, in overall terms, notes Justin Fabo, Senior Economist at ANZ, anticipating some slowing in jobs growth by early 2016.

Key Quotes

"A mixed but overall soft report. The fall in employment in September was outside the range of economists’ expectations (0k to +25k). Full-time jobs growth appears to have lost some momentum. The unemployment rate was marginally lower (to 6.16%) in unrounded terms, but the participation rate also declined a touch."

"A range of other labour market indicators suggest that underlying labour market conditions remain more positive than an interpretation of today’s labour force report in isolation. For that reason, we expect jobs growth to remain relatively solid in Q4."

"At the state level, labour market conditions have mirrored activity indicators. That is, NSW and Victoria have outperformed, while Western Australia has been weak amid weaker mining conditions. Queensland continues to punch out improving numbers (confined to Brisbane), which is supported by improving job ads in that state."

"Despite relatively strong jobs growth of 2% over the year, the unemployment rate has remained stuck around 6–6¼%. We expect the jobless rate to stay around 6¼% for an extended period and for the rate of jobs growth to slow somewhat given the soft domestic and global backdrops."

"The significant support to jobs growth from the labour-intensive services sector is expected to wane amid less support from housing activity and the lower currency. We recently changed our RBA call to 50bps of cuts in the first half of 2016, in part because an unemployment rate stuck above 6% would ultimately prove to be too uncomfortable for the Bank."

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