Tim Mazanec's  Instablog

Last quarter I was arguing that the strength of the economic rebound in Australia was weaker than the headlines were touting.  (Most of those blogs are on www.hedgeforward.com )  By using the trend employment data instead of the seasonally adjusted data that hits the headlines the employment situation was clearly weaker.  The hiring that was being done was mostly part-time job creation which would not sustain the economic recovery 'down-under'.

Well the RBA surprised many in the market recently by not hiking to 4% but how long can they hold off?  The chart below shows that the situation is now getting better in Australia:



The Trend data shows that hiring for both males and females has turned the corner.  Hopefully for males the bottom was in H2 of 2009.



Still those looking for employment have become more discouraged it appears.  When an economic recover begins more people should be looking for jobs, not becoming more discouraged.



Which adds up to continued fruitful discussions at RBA meetings on the strength of employment situation.  If the we continue to see lack-luster demand for full-time positions then expect the RBA to be far less aggressive in H1 of 2010.  For those such as myself that still believe that the global economic recovery will be led by the US/G7 and not Emerging Asia then these reports are of significant importance when debating risk this year.






This report is for your information only and does not constitute investment or business advice or an offer to buy or sell securities.