Australian employment suffered a shock fall in October as the jobless rate jumped as the coronaviruses continued toplague the labour market, though all signs point to a quick recovery now that the economy is reopening.
The Australian Bureau of Statistics ABS data on Thursday showed that employment fell by 46.300 in October, endangering analysts forecasts of a 50,000 increase.
The unemployment rate went up to 5.2% from 4.6%, well above the 4.8% forecast, while participation rose by less than expected to 64.7%, with many still unable to look for work.
The jobs survey was taken from Sept. 26 to Oct. 9 when restrictions were easing and Victoria state was still locked down, the surprise likely had a lot to do with the timing of the survey.
While employment in NSW went up by 22,000, it fell 50,000 in Victoria and dropped the national result down. The stay-at- home restrictions were steadily removed as the labour market's indicators have been much stronger.
The spike in unemployment rate shows that there will be some frictional unemployment over the next couple of months, said Sarah Hunter, Chief Australia Economist for BIS Oxford Economics.
There is a possibility that vacancies are still running at record highs but this fallout should be transitory. The online job site SEEK reported a 10% jump in ads in October, which put them a 46% above where they were in December 2019 before the epidemic hit.
It is a tightness of the labour market as international migration has yet to re-started, which is an indicator of the tightness of the labour market.
While this imbalance had produced pockets of wage heat, there was little sign as yet of the broad-based pick up that policy makers would like to see.
The data on wages for the third quarter are due on November 17 and any surprise on the high side would support the case for an earlier start to policy tightening.
Analysts think the annual wage growth will pick up to about 2.1%, from 1.7% in the second quarter, but remain well short of the 3%плюс levels the RBA is looking for.
The last time that wages grew at 3% or more was in early 2013, and the firms show an ingrained reluctance to pay more, according to the central bank.