Jobs to Fiscal budgets
Aussie jobs: In case you were wondering there are 4,905,800 full-time working males in Australia and 2,665,500 full-time working females. Yes, it was a long journey but I counted every single one of them, even in the Outback!
The ABS also counts part-time workers in their surveys and there are 3.2m people working part-time, 70% of which are female. In all honesty that sounds like more than a few mothers working part-time to make some money to help pay the bills. Probably not much in terms of benefits or stock options. Of course my point is that things are not as glorious down-under as some cheerleaders have alluded to.
The chart below left shows job creation on a 3 month rolling basis versus the unemployment rate (inversely). It's only now that job creation has begun but when you break down those jobs it shows that Australia has only created part-time jobs this year. Full-time jobs are still in lay-off mode for both males and females. Part-time jobs are a good start but won't support the economy. So when the report is released tonight check out the break-down of jobs, the economy will need full-time jobs to be created as well as part-time jobs for it to be considered a success.
The chart below right proves my point, there is a large gap between the participation rate (shown inversely) and the unemployment rate suggesting that there is some disconnect that is ongoing in the employment market.
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Back to the jobs in the US. Last week's Jobless claims showed a 20k improvement and the neutral line is 490k this year, meaning that if jobless claims come in below 490k then the US has begun creating jobs (from a survey point of view). Certainly the rate of discouraged job-seekers is increasing and benefits are running out for others, but a continued drop in jobless claims will be viewed as a positive sign by the market.
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Thursday afternoon awaits the release of the US monthly Federal budget. The resulting figure is almost meaningless to spot traders as it is the details within the report that matter and they are always overshadowed.
First on the budget, its quite easy to notice 2009 has brought about deeper deficits. And even before 2009 its only in tax season that the Federal gov't can celebrate a surplus, meaning in April and in October (tax extensions due to K1s and the rest).
Second, and I've stated this more than a few times, the details within the report show actual tax withholding information. So its easy enough to find out if monthly earnings are up or down? The Treasury could break it down further if they wanted and tell us how many are employed and provide actual figures on the US employment situation. After all if you have a job you are paying taxes, not taking surveys. Why the market prefers surveys is beyond me. In the chart below right we need to start seeing those withholding taxes pick-up or this will turn out to be a very fair warning that the economy is actually getting worse. Tomorrow we'll update these charts to see if things are improving or not, as if things are not improving do you still want to be long Euro and Aussie at these levels?
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