The labour market is not as strong as recent figures suggested, the latest estimates from the Australian Bureau of Statistics (ABS) show.
The unemployment rate rose to 5.3 per cent in July, seasonally adjusted, from 5.1 per cent in June, the ABS said on Thursday.
This was the effect of a recorded rise in labour force participation rate to 65.45 per cent from 65.30 per cent.
If the participation rate had remained steady, the increase in the number employed, 23,500, would have been enough to keep unemployment at the 5.1 per cent rate recorded in June.
The ABS also revised data going back to 2006, based on new demographic data showing stronger growth in the population through most of 2007, 2008 and 2009, but slower population growth from late 2009.
The effect of that was to increase estimated employment growth in earlier periods but to reduce growth in more recent months, but with no significant changes in unemployment rates or participation rates.
Employment growth is now estimated to be 303,700 rather than 256,200 through 2007, 194,100 rather than 136,000 in 2008, and 135,000 rather than 114,100 through 2009.
The increase in employment in the first half of 2010 now is estimated to be 156,200, however, rather than the 184,600 published a month ago.
Thee monthly trend rate in employment growth for July was 16,700, according to the Bureau’s smoothed, seasonally adjusted series.
That is almost exactly half the recent peak of 33,500 recorded for November last year.
The slower employment growth now reported for recent months is more consistent with recent soft economic growth data, but is still most likely an overestimate.
The working-age population growth rate from June to July was 2.1 per cent on an annualised basis, the ABS figures show.
The slide in the numbers of net long-term arrivals from overseas over the past year suggests a population growth rate as low as 1.5 per cent would be closer to the mark, in which case the 23,500 rise in employment in the data would be around 15,000 in reality.
In other words, employment growth is not as strong as previously estimated, and probably not even as strong as estimated currently.
Perhaps policy-makers will take the employment data with a grain of salt and not be deluded into thinking the labour market is generating relatively large numbers of new jobs at the moment.