AUSTRALIA DATA: Jobs Volatile, Underemployment Very Low
Australia’s monthly labour market data are volatile and August seemed to unwind July’s moves. Looking through this, annual employment growth was its lowest since the pandemic but the unemployment rate held steady at 4.2% and underemployment continued to trend down to its lowest since 1991. RBA Governor Bullock focussed on the Q2 average unemployment rate given the data’s volatility and that is likely to remain the case. September prints on 16 October.
Australia unemployment vs underemployment rates %
Source: MNI - Market News/ABS
- Employment fell 5.4k in August after rising 26.5k driven by a 40.9k drop in full-time jobs (FT) following July’s +63.6k. Part-time (PT) rose 35.6k after falling 37.2k and the 3-month average at 12.9k is outperforming FT’s -5.1k. Annual growth is at 1.5% y/y, the lowest since 2021, with FT up 1.3% y/y and PT +1.9%.
- Again there are tentative signs of a switch away from FT jobs to PT, which was also reflected in hours worked with FT down 0.9% m/m but up 0.8% y/y but PT up 1.8% m/m & 2.1% y/y. More data is needed though to confirm this.
- The participation rate eased to 66.8% from 67% with the labour force falling 6k in August despite a 38k increase in the working-age population. Thus the number of unemployed fell 0.9k keeping the unemployment rate steady at 4.2%. The Q3 average is in line with Q2’s.
- The decline in the labour force and participation rate suggest that the soft jobs print may reflect fewer skilled candidates in August.
Australia employment vs labour force y/y%
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US: Viewpoint On the AI Cycle
Following on from Adam Butler's thread on X which I highlighted yesterday. The noise around AI’s ability to continue to grow at its current pace is starting to get louder. CNBC reported on an interview OpenAI CEO Sam Altman gave to The Verge in which it was reported he thinks the AI market is in a bubble. Below are some excerpts from the interview including some other viewpoints sourced from X: https://www.cnbc.com/2025/08/18/openai-sam-altman-warns-ai-market-is-in-a-bubble.html
- CNBC - “OpenAI CEO Sam Altman thinks the artificial intelligence market is in a bubble, according to a report from The Verge published Friday.“
- “When bubbles happen, smart people get overexcited about a kernel of truth,” Altman told a small group of reporters last week.
- “Are we in a phase where investors as a whole are overexcited about AI? My opinion is yes. Is AI the most important thing to happen in a very long time? My opinion is also yes,” he was quoted as saying.
- Lance Roberts on X: “Given that virtually all of the earnings growth is coming from just the Tech sector, market concentration is the obvious result. However, what happens if that narrative cracks?”
- Alexander Stahel on X: “Prometheus & Hyperion, Colossus, and Stargate — each $100B+ bets on building the most powerful supercomputers to drive the next AI wave. For now, the AI capex boom is real — a huge difference from 1999. But if these models fail to turn into viable businesses, spending will be cut faster than it was announced.”
- “Two tier economy: AI capex boom versus the real economy.” See Fig.1 Below.
- Joseph Wang on X: “The AI boom has supported the real economy through capex and markets through enthusiasm. But now it is clear that progress is stalling and the best case scenarios are far in the future. That realization could change market sentiment."
RenMac on X: “Are plans to use AI stalling out? Percent of firms surveyed by Census (BTOS) that used AI in the last two weeks slid to 8.8%, lowest since May. Not welcome if it continues since this is what's been holding up growth this year.”
Fig 1: S&P 500 Vs S&P 500 Air Freight & Logistics
Source: MNI - Market News/@SamanthaLaDuc
CHINA PRESS: Local Governments Need To Implement Housing Policy Fully
Local governments must fully implement housing sector policies to promote supply-demand balance, stabilise prices and restore market confidence, as recent data shows the market remains in a deep adjustment phase, according to Yan Yuejin, deputy director at the E-House China R&D Institute in Shanghai. Yan emphasised that authorities must further intensify policy efforts, particularly in reducing home-buying costs and stimulating demand release.
CHINA PRESS: China Must Expand Economic Recovery - Premier
China must expand the momentum of economic recovery while striving to meet its annual economic and social development targets, Premier Li Qiang emphasised at the ninth plenary meeting of the State Council. Li underscored the need to bolster confidence and recognise the risks and challenges facing the economy, including a severe external environment. He called for greater efforts to stabilise employment, safeguard livelihoods, enhance disaster prevention and strengthen safety and production oversight, in order to ensure overall social stability. (Source: Yicai)
