Australia’s unemployment rate increased 0.1 percentage points to 6.1% in September, according to official figures released yesterday.
The Australian Bureau of Statistics reveals that the number of employed persons decreased by 29,700 in September following a revised increase of 32,100 persons in August (previously reported as a 121,000 rise in jobs). The decrease in September was driven by part-time employment, according to the Bureau.
However, economists are questioning the authenticity of the unemployment data after the ABS issued a press release on Wednesday admitting it will have to revise its July and August unemployment figures because there is “little evidence of seasonality” in these months.
“It is critical that the ABS produces the best set of estimates that it can so that discussion is on what the estimates mean, and not the estimates themselves,” acting Australian statistician, Jonathan Palmer said.
“To assist in this, the ABS will commission a review with independent external input to develop an appropriate method for seasonally adjusting October 2014 and following months’ estimates.”
In July, the ABS reported an unemployment rate of 6.4% - the highest rate in 12 years and the first time since 2007 it was higher than the US. Although, economists are now saying that the unemployment rate would have realistically hovered around 6% all along.
Savanth Sebastian, economist for CommSec, said the recent employment data has painted a “murky picture” of the current employment landscape.
“Not only does it make it difficult for investors and analysts to get a clearer picture of employment growth across the economy, but it will result in Reserve Bank policymakers being more cautious when it comes to interest rate decisions,” he said.
“The labour market is the last key hurdle facing Reserve Bank officials before a change in monetary policy language and rhetoric could be made. Until credibility and confidence can be restored to the labour market statistics the Reserve Bank will tread cautiously.”
According to Sebastian, the Australian economy has been showing healthy signs of recovery, so when assessing the employment landscape it is important to look at the broader trends.
“The only way to look at the data and avoid the recent volatility would be to focus on the broader trend – and in that context there has certainly been an improvement in the employment landscape. Last year employers were working existing staff longer and there had been a lift in productivity, while it is now clear that employers are adding to the workforce – whether it is part time or full-time roles. In fact a total of 125,000 jobs having been created so far in 2014.”