Focus for 14 JAN 2010: Australian December Labour Force Survey

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Focus for 14 JAN 2010: Australian employment change and unemployment rate (December)

Around 10,000 jobs to be added after 3 months of strong gains
Unemployment rate to tick higher to 5.8%
Job advertisements rise by most since May 2007

The Australian Bureau of Statistics will release the results of its monthly Labour Force Survey for December on Thursday 14th January at 00:30GMT with the median forecast of economists polled pointing to around 10,000 jobs being added, which is somewhat lower than the previous three months, which showed surprisingly high numbers of 40,500 and 31,200 for September and November respectively. November’s figure of 31,200 beat the market’s estimate of a gain of 5,300 as the global economic recovery kicked in during the second half of 2009 (employment change fluctuated between gains and losses for the period from September 2008 to September 2009) and Australia benefited from the rise in commodity prices such as copper and gold.

Although the unemployment rate dipped to 5.7% in November instead of rising to 5.9% as economists had expected, the improving job market conditions suggest that more people will return to the labour force in December and this will be reflected in the unemployment rate ticking higher to 5.8% last month. Australia’s unemployment rate has steadied in a range of 5.5-5.8% since March 2009, with the 5.8% rate being the highest seen since mid-2003.

Data released by Australia and New Zealand Banking Group (ANZ) on Monday showed a month-on-month gain of 6% in job advertisements in December (largest increase since May 2007), led by a rise of 11.6% in major metropolitan newspapers. This adds up to a brighter outlook for the Australian jobs market even though the unemployment rate may not yet have peaked (similar to the situation in the U.S.).

The Australian dollar has been rising steadily since the end of December (helped in part by the Reserve Bank of Australia’s 3 rate hikes) and is now within 1% of its 15-month high of 0.9406 seen in November. The extended rally from 0.8735 looks to be in need of a correction and an employment change figure that matches analysts’ estimates may be the catalyst for some profit taking, especially in the Asian session, as would a higher-than-expected rise in the unemployment rate. A gain of 25,000 jobs or more could encourage short-term buyers who would then be targeting option-related stops at 0.9400/10 and 0.9500.


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