Wisely, Queensland Treasurer Curtis Pitt did not get too excited over yesterday’s employment numbers, which were surprisingly strong at a national level, with the Treasurer noting, regarding the State unemployment rate, “While it’s welcome news that the seasonally adjusted unemployment rate fell 0.1 per cent to 6.2 per cent in October the ABS’s recent caution about the volatility of seasonally adjusted figures should be noted.”

The Treasurer was right to point out the good news of very respectable employment growth in Queensland in recent months (see chart above). Many of the new jobs were likely in the building industry and hospitality, particularly as the lower dollar boosts tourism and as households are starting to shake off the frugality induced by the financial crisis.

The jobs growth we are seeing is welcome, but could be much higher. As Pete Faulkner has noted in an excellent dissection of yesterday’s ABS labour force data (see Strong jobs growth sees unemployment rate in surprise drop):

Trend jobs growth in QLD has been running at a pace greater than the expansion of the working population. The labour market has seen some credible improvements in recent months and a continuation at this pace should see the unemployment rate steadily drifting lower.

In other words, jobs growth is good, but not great, particularly from a historical perspective. The unemployment rate will only steadily drift lower, rather than experiencing large rapid falls. And there is, of course, the possibility that recent gains could be reversed, if some of the risks to the economy that have been highlighted in recent months (e.g. declining business investment and a China crash) are realised. So, it is not yet time to get excited about the economy.