Australian employment figures beat the consensus expectation in September, rising by 14.5K after a 9K decline in August, although unemployment was a bit higher, as well, rising to 5.4% from 5.1%.
This was the largest gain in jobs since May and was driven by a 32K rise in full-time jobs, which was also the largest increase since May.
The trend in employment has shown only a small change since earlier this year, with employment up a modest 0.5% over the past 12 months.
While the figures were enough to prompt enough positivity amongst investors to boost the Australian dollar, Westpac's FX Strategy team believe there is nothing to celebrate:
"Today’s employment report in Australia was arguably better than most expected - though pretty much bang on Westpac’s +13k forecast - helping. However, its not clear that the jobs number was such good news to us. We are now three quarters of the way through the year, and total employment has lifted just 97.8k – a very weak result."
Kieran Davies at Barclays says he is not overreacting to the rise in unemployment in September, "although it still points to some loosening of the labour market and helps justify another interest rate cut by the end of this year (we expect a November cut at this stage)."
Regionally, the results show that Queensland is clearly struggling.
Employment in that state is down 1.0% over the past year (South Australia shows a similar decline, but it is much smaller in size), with unemployment rising from the low to mid-5s over recent months to 6.3%, which is the highest rate since 2009.
"Quarterly industry data are published with a delay, but the weakness probably reflects consolidation in the (fragmented) coal industry, where high-cost mines would be under pressure from lower export prices, and the likely start of public sector job cuts after the state election earlier this year," says Davies.
To date, public sector job cuts have been almost evenly split between New South Wales and Victoria, but Queensland has seen faster growth in its state bureaucracy over the past 10 years than almost every other state, up 50% versus a national average of 27% (South Australia has seen a gain similar to Queensland's).