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Chief economist update: A wonderful set of numbers

The Australian Bureau of Statistics (ABS) has reported a large uptick in the number of Australians finding their way back into the workforce with 178,000 jobs added in October.

"Today's job numbers confirm that Australia's economic recovery is gaining momentum," Treasurer Josh Frydenberg said.

Frydenberg was, of course, referring to the wonderful set of labour market numbers released by the ABS.

The ABS reported that 178,800 workers found employment in October - a pleasant surprise to markets that were expecting total jobs numbers to drop by 40,000 over the month in response to the government's scaling back of its JobKeeper subsidy payments.

The latest employment number has reduced the total jobs lost this year from more than 917,000 to just around 195,000 - a 79% improvement. Further, the annual rate of decline in total employment has eased to 1.0% in October from 2.6% in the previous month.

Even better, the latest stats revealed strong gains in both full-time and part-time employment in October. Full-time employment increased by 97,000 workers while part-time hires jumped by 81,800.

Sure, the unemployment rate inched up to 7.0% from 6.9% in September but this was due to the sharp increase in the participation rate to 65.8% in October from 64.9% in the previous month - indicating workers' confidence over their job prospects.

But wait, there's more! The underemployment rate dropped by one percentage point to 10.4% in October from 11.4% in the previous month. The labour underutilisation rate decline by 0.9 percentage point to 17.4%.

More.  Hours worked in all jobs increased by 1.2% in October.

This wonderful set of numbers could start a virtuous cycle in the domestic economy whereby rising employment boosts consumer optimism, stimulating spending, lifting company sales and profits, encouraging business spending in plant and machinery and staff and stimulate more hiring.

This, in turn, could also limit the amount and duration of government support measures that would have positive impact on the government budget and the national debt.

Read our full COVID-19 news coverage and analysis here.

Read more: ABSAustralian Bureau of StatisticsFederal TreasurerJosh FrydenbergJobKeeper
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