Labour force stats are out for August and the unemployment rate took a marginal jump, but that’s from the denominator making a substantial move as more people joining the workforce.
For the month of August:
👷🏻 Unemployment rate rose to 4.65% (⬆️ 0.16%) 👷🏻 Employment grew by 39,000 people (⬆️) 👷🏻 Participation rate rose to 67.1% (⬆️ 0.2ppt) 👷🏻 Employment-to-population ratio rose to 63.9% (⬆️ 0.1ppt) 👷🏻 Underemployment rate fell to 6.2% (⬇️ 0.1ppt)
The key point with this print is to look through the rise in the unemployment rate and focus on the strong growth in jobs and participation. Both of these are positive stories, and while the math means the unemployment rate rises, it doesn’t signal weakness.
The other interesting wrinkle is the ABS has changed how it runs its supplementary survey and removed the old August adjustment. The ABS says any impact should be smaller than normal sampling noise, but it's still telling users to lean on trend data for August.
This was the last key data point to drop before the RBA’s meeting next week and, in my view at least, this locks in a rate rise. I expect the RBA to look through the unemployment rate at the continued strong growth in employment and determine that the economy continues to run a bit too fast and needs the brakes applied a bit harder.