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

Dhwani Mehta FXStreet

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. “

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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