Released along with the report on the July CPI was the employment report for June, and it’s certainly at odds with the prevailing market sentiment (‘000):
Here we see a picture of an economy in the pink of health, as employment jumped nearly 400k in June. That’s the largest absolute increase recorded since the series started in 2009, and quite at odds with all the other stuff flying around these days. It also appears to corroborate the acceleration in inflation – more jobs are being created, which could be leading to demand side price pressures. Or inflation could be just a factor of rising global prices, as the IMF’s commodity food price index is up sharply for June.
Nevertheless, the increase in employment in June is more than unusual, supressing the unemployment rate to below 2.8% for the first time since last year:
DOS seasonally adjusted rate of unemployment is down to 2.7%, just the second time this has been recorded since the adjusted series was introduced. The interesting thing would be if labour market pressure is translating into wage increases, and there’s some evidence that this is happening with manufacturing wages even as sales has dropped (log annual changes):
On that basis, we should continue to see sustained growth in private consumption, which would form some basis for growth in the quarters ahead.
Technical Notes:
- June 2013 Employment report from the Department of Statistics (warning: pdf link)
- Manufacturing sales and wage data from June 2013 Monthly Manufacturing Statistics (warning: pdf link)
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Hisham, can you put things into perspective? I'd like to request what would the figures be like when compared to economies similar to MY.
ReplyDeleteThanks.
9H,
DeleteI don't know what "similar" would be so here's a roundup of the region:
Australia - 5.7%
China - 4.1%
HK - 3.5%
Indonesia - 5.9%
Japan - 3.9%
Korea - 3.1%
Philippines - 7.5%
Singapore (overall) - 1.8% (residents) - 2.7%
Taiwan - 4.25%
Thailand - 0.5%
All data is unadjusted and the latest data point available, and might not be the same for all countries.
I'd also caution against taking the numbers too literally, as there's some error built into employment/unemployment surveys and cross country comparisons are complicated by different methodologies, as well as data issues such as underemployment.
Thanks, much obliged.
ReplyDeleteI enjoy your articles a lot, it's rare to find such a blog nowadays.
wonder how DOSM does its survey on unemployment (presumably its on nationals only) without having true and reliable stats on foreign workers?
ReplyDelete@Anon,
DeleteSorry for the late reply. DOS actually surveys both nationals and foreign workers, but obviously illegals fall out of the net. That's possibly one reason why employment and unemployment numbers don't vary much with changes in economic activity, because most job losses are concentrated in the illegal workforce.