Australia: Employment risks a ‘seasonal’ dip in August - TDS

In the view of analysts at TD Securities, the Australian labor market is expected to see a slowdown in jobs growth in August due to seasonal factors. The Aussie jobs data will be reported on Thursday at 0130 GMT.

Key Quotes:

“For Thursday's report, we expect a brief 'seasonal' -10k August dip, not the beginning of a deteriorating labor market. We also look for -20k full-time jobs after an outsized +63k addition in the last two months. So not only do we look for a correction, but led by full-time jobs. This is rather pessimistic compared with consensus' +18k.

So why do we expect a fall? August is a seasonally weak month for employment, with an average of -95k losses from 2009 to 2013 in original (or raw) terms. A spanner in the works was 2014, where employment unexpectedly rose by +31k, throwing the seasonal adjustment process into chaos.

Along with seasonal patterns, the ABS acknowledged a much weaker composition in the July household sample (which will also impact the August report) where "the incoming rotation group in July 2018 had a lower employment to population ratio than the group it replaced. “