(This is an excerpt from an article I originally published on Seeking Alpha on September 11, 2014. Click here to read the entire piece.)
The August employment report from the Australian Bureau of Statistics (ABS) delivered a tremendous surge in jobs. The additional 121,000 people employed in August far exceeded the “consensus forecast” of 15,000. Even this forecast was quite optimistic given 1991 was the last year Australian employment increased from July to August according to the ABS in its commentary. At 6.1% the unemployment rate is now a bit off 12-year highs. The numbers are so strong that the ABS noted in its commentary: “Because of the unusually strong increase in employment estimates, the ABS has extensively checked the data.” These checks were also necessary because the ABS introduced several changes to its survey and statistical procedures in the August report.
A quick look under the hood reveals reasons to be disappointed with the jobs report:
- 88% of the job creation came from part-time jobs.
- Since most of these part-timers were likely looking for full-time employment, the under-employment rate shot up from 7.8% to 8.7%.
- Labor force under-utilization also soared from 13.6% to 14.6%.
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Source: FreeStockCharts.com
Be careful out there!
(This is an excerpt from an article I originally published on Seeking Alpha on September 11, 2014. Click here to read the entire piece.)
Full disclosure: short AUD/USD