September employment was down 5,100, missing expectations of a 5,000 increase. The August gain of 17,400 was revised up to 18,100. At the same time, the unemployment rate remained at 6.2 percent, despite a fall of 0.1 percentage points (based on unrounded estimates) from August 2015. The seasonally adjusted labour force participation rate decreased 0.2 percentage points (based on unrounded estimates) to 64.9 percent in September 2015 suggesting that fewer people were looking for work. The seasonally adjusted number of people unemployed decreased by 8,100 to 772,500 in September 2015.
Full time positions fell by 13,900, erasing the 11,000 jobs created a month earlier. Part-time employment grew by 8,900 positions, slowing from the 7,100 uptick a month before. Monthly hours worked also declined.
The largest absolute decreases in seasonally adjusted employment were in Western Australia (down 9,300 persons) and South Australia (down 8,400 persons). The state with the largest increase in seasonally adjusted employment was Queensland (up 4,600 persons). The largest decreases in the seasonally adjusted unemployment rate were in Tasmania (down 0.4 percentage points) and South Australia (down 0.2 percentage points). The only state with an increase in the seasonally adjusted unemployment rate was Victoria (up 0.1 percentage points).
The Labour Force Survey is a key economic indicator giving an overall picture of employment and unemployment. Employment counts the number of paid employees working part-time or full-time in the nation's business and government establishments. The unemployment rate measures the number of unemployed as a percentage of the labor force.
This report is used as an indicator of the health of the domestic economy. Employment trends highlight the strength in job creation and the implications for future sectoral activity. The unemployment rate is used as an indicator of tightness in labor markets and can foreshadow a future increase in wages. Labor force data provide investors with the earliest signs of industry performance. While other data are produced with a month or two delay, these data are available only a week to 10 days after the end of the latest month. Reactions can be dramatic - especially when the result is unanticipated.
The information in the report is invaluable for investors. By looking at employment trends in the various sectors, investors can take more strategic control of their portfolio. If employment in certain industries is growing, there could be investment opportunities in the firms within that industry.
The bond market will rally (fall) when the employment situation shows weakness (strength). The equity market often rallies with the bond market on weak data because low interest rates are good for stocks. But sometimes the two markets move in opposite directions. After all, a healthy labor market should be favorable for the stock market because it supports economic growth and corporate profits. At the same time, bond traders are more concerned about the potential for inflationary pressures.
The unemployment rate rises during cyclical downturns and falls during periods of rapid economic growth. A rising unemployment rate is associated with a weak or contracting economy and declining interest rates. Conversely, a decreasing unemployment rate is associated with an expanding economy and potentially rising interest rates. The fear is that wages will accelerate if the unemployment rate becomes too low and workers are hard to find.