Australian Employment Change came in at +71.5K vs an expected +10K. Full time employment grew 17.8K, and part-time employment increased by 53.7K. The gain in employment is so strong that unemployment rate has been pushed lower by 0.1 percentage point to 5.4% despite an increase of participation rate from 65.0% to 65.3%. This is a huge improvement from previous month’s data, and signal a turn around in Australia’s employment force which has seen a fall in full-time employment for previous 2 consecutive months.
1 Min Chart
Price jumped higher predictably, pushing further away from the 1.03 significant resistance. What is more interesting is that price maintained upward trajectory after the initial bullish push, showing the inherent bullishness in Aussie.
1 Hourly Chart
The rally was important for the bulls beyond simply pushing price above 1.03. Price was looking to head lower with the entry into the Kumo during US trading hours yesterday. There was also a hint of bearish breakout with price trading below the rising trendline and Ichimoku threatening a bearish Kumo Twist. The rally post Employment Data negated all the bearish signals and sent price back on bullish momentum again. Any pullbacks from here may find support along 1.034 – 1.035 which is also the dip found in Dec 2012.
This strong employment figure is in line with the stronger GDP seen last week and enhances RBA’s current stance of keeping rates as it is. It is indeed surprising to see labor force bouncing back especially since mining sector in Australia is expected to peak this year if it haven’t already. Capital Expenditure from all sector remained weak, but if production figures continue to grow, and people are still getting employed, then perhaps Australia’s economy may not be as bad as we think it is, despite what other peripheral data are showing.
** Update ** (14/3/13 6:22 am EDT)
There are rumors circulating that RBA Dep Gov Kent saying that the job numbers was inflated due to changes in survey sampling method. However there is no direct quote and ABS website shows that sampling change will only start in May 2013. AUD/USD trading lower but remains higher than pre Job release levels.
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