October jobs numbers worst for three years

THE economy lost 19,000 jobs in October for the workforce’s worst month in three years, pushing unemployment higher and increasing chances of more RBA rate cuts.

The number of people with full-time work fell by 10,300 and those in part-time work by 8,700, according to Thursday’s data from the Australian Bureau of Statistics, to mark the largest monthly total of job losses since September 2016.

Economist consensus had been for 16,000 jobs to be added and for the unemployment rate to remain unchanged at a seasonally adjusted 5.2 per cent.

In the event, it rose to 5.3 per cent and the Australian dollar dropped 0.6 per cent against the US dollar after the data was released, hitting a new four-week low of 67.97 US cents.

The figures offer more evidence that three Reserve Bank rate cuts since June and government tax offsets have failed to lift consumer spending or give businesses the incentive to expand, hire more people, or offer more hours.

Underemployment rose by 0.2 percentage points to 8.5 per cent during October – increasing the labour market slack that has kept a lid on wages growth.

Total underutilisation is now back at the recent high of 13.8 per cent.

Economists said another rate cut early next year was increasingly likely.

The RBA does not meet in January so, chances of a December cut still slim, that suggests a February move.

“The data clearly confirms that there is plenty of slack in the economy; (and) reinforces our view that the RBA will cut the cash rate again, in early 2020, to further support domestic demand,” BIS Oxford chief economist Sarah Hunter said.

Full-time opportunities have accounted for just 54 per cent of employment growth over the past year, according to Indeed.com’s APAC economist Callam Pickering, well below the level of full-time job creation in 2017 and 2018.

Mr Pickering said a further slowdown in employment growth was likely.

“The Australian economy has created a lot of jobs this year but not the high-quality roles that were created in the past,” he said.

“That is a common feature of a soft economy and a trend that should persist into early next year.”

The seasonally adjusted unemployment rate increased by 0.3 points in NSW to 4.8 per cent, as employment decreased by 10,300 people.

The jobless rate in Victoria rose by 0.1 points to 4.8 per cent despite 2,900 more people finding work, while it decreased by 0.1 points in Queensland to 6.5 per cent even as 14,000 people lost work.

Tasmania’s unemployment edged 0.2 points lower to 5.9 per cent while Western Australia and South Australia recorded no change.