The Australian Bureau of Statistics has released its latest tranche of weekly payroll jobs growth data over the month to September 16, 2023, remaining flat at 0.0 per cent.
In fact, the number would’ve gone into decline were it not for electoral jobs driven by the looming Voice referendum.
The Australian Electoral Commission (AEC) recently advertised 100,000 temporary roles to underpin Australia’s referendum.
Voice referendum jobs prevent negative read
“A fall in payroll jobs was seen in 12 of 19 industries over the month,” ABS Head of Labour Statistics Kate Lamb said.
“These falls were offset by an increase in the Public administration and safety industry, which is related to the upcoming referendum on the Aboriginal and Torres Strait Islander Voice.”
Temporary workers for government agencies are typically paid weekly on a contractor basis, explaining a flat as opposed to a negative read.
This comes after Australia only notched a 0.2 per cent rise last month.
Possible sign of slowdown
Ms Lamb mused whether or not this could be the beginning of a much-awaited but still elusive labour market slowdown.
“Over the 12 months to mid-September 2023, payroll jobs rose 2.4 per cent, down from 2.7 per cent annual growth to mid-August 2023,” she said.
“This suggests that labour market growth may be starting to slow.”
Payroll jobs rose the most over the month to mid-September 2023 in the Australian Capital Territory, up 0.4 per cent, while Western Australia followed with a rise of 0.3 per cent.
Why’s the job market so hard to read lately?
A slowdown in the labour market would lead to a rise in unemployment, and we’re still not seeing that.
Economists have been noting despite record-low unemployment, we also have myriad companies reporting staff shortages.
Overseas, a growing consensus is forming that the problem is driven by a much larger story – the fact that “baby boomers” are now retiring.
In other words, the issue is because of ageing populations in the West. China suffers from this problem too.
The World Health Organisation notes China has the fastest aging population in the world, providing some insight into the current lacklustre economic situation there.
Participation rate distortion
Aging populations are pushing down overall participation rates of people seeking work, which is effectively distorting the numbers.
BlackRock in the US issued its own research into this last year. The world’s most valuable investment firm expects that we have entered a “new normal” for population demographics.
BlackRock doesn’t expect pre-COVID trends to return.
Aging populations add insight into how the American consumer remains so unexpectedly resilient as household savings diminish. It’s because over sixty fives are spending a lot of money while all other age groups hold back.
COVID-19 and the lockdowns (as well as one million dead Americans) appear to be encouraging older citizens to splash out.
Yearly patterns challenge thesis
Beyond participation rates, whether flat growth over the month to September 16, 2023, indicates Australia’s labour market is starting to slow remains unknowable.
Complicating this thesis is a general trend in payroll job growth that has occurred in September for the last four years.
If payroll jobs growth doesn’t fall into the negative at the next read, we’ll have evidence that the labour market has only tightened further.
A dip in October is also typically followed by a rise leading into Christmas – think casual contracts in retail and hospitality. Just take a look at the chart below.
Data has its shortfalls
Payroll jobs refer to workers in Australia who are paid on a weekly basis, implying non-professional salaries. Of course, each business is free to structure its own pay cycle, so the data can be hard to read.
The ABS notes it takes years of analysis for the data to be seasonally adjusted in a way that matters.
The Bureau also pointed out that industries including agriculture, forestry, fishing and construction have high counts of owner-managers not included.