| Consensus | Consensus Range | Actual | Previous | |
| Employment - M/M | 21,000 | -5,000 to 40,000 | 17,800 | 65,200 |
| Unemployment Rate | 4.2% | 4.1% to 4.3% | 4.1% | 4.1% |
| Participation Rate | 66.7% | 66.7% |
Highlights
Labour market conditions in Australia were steady in January. The number of people employed in Australia rose by 17,800 persons in January, moderating from an increase of 65,300 persons in December. Part-time employment fell during the month, but this was outweighed by a big increase in full-time employment.
Today's data also show the unemployment rate was unchanged at 4.1 percent in January. The participation rate was also unchanged at 66.7 percent.
At their policy meeting earlier in the month, officials at the Reserve Bank of Australia noted that"the labour market was a little tighter than consistent with full employment", supporting their decision to increase policy rates by 25 basis points. Today's data shows that conditions in the labour market remain relatively tight, and will likely reinforce concerns about the inflation outlook.
Market Consensus Before Announcement
The consensus sees jobs up 21K for January after rising a large 65K in December. The unemployment rate is expected to tick up to 4.2 percent versus 4.1 percent in December.
Definition
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 labour force.
Description
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.