Saturday, 11 February 2012

50,000+ new jobs in January?

The January labour force data will be released this Thursday and as always, it will move markets and influence the monetary policy deliberations of the RBA.

Having been a keen follower of the monthly jobs numbers for a quarter of a century, I know it is impossible to accurately and consistently predict the monthly numbers.  It's a fluke if anyone gets anywhere near the mark.

Having said that, there seems to be a feeling from some in the official family that the labour market is holding up much better than suggested in the Australian Bureau of Statistics monthly survey.  If so, there could well be a superficially large jump in employment in January.

According to the ABS data, employment fell by around 36,000 in the last two months of 2011.  If there is a problem with the way these data have been collected, collated or seasonally adjusted and the true performance of the labour market is that employment is growing around trend, we could see a jump in employment of 50,000 or so when the data are printed this Thursday.  That's made up of a trend 15,000 increase in employment in January plus a claw back of the 36,000 jobs lost in the prior two months.  This also assume the statistic "errors" are recouped in 1 month which may be a bit too much to expect.

Either way, employment in January should show a big jump.

If it doesn't, the RBA will have to take stock of its assessment of the trend growth of the economy and employment.

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