Full-time up, part-time down: unemployment rate flat

The monthly labour force stats came out today. Here’s the key stats from the ABS:

SEASONALLY ADJUSTED ESTIMATES (MONTHLY CHANGE)

• Employment decreased 29,300 (0.3%) to 11,421,300. Full-time employment increased 24,500 persons to 8,051,000 and part-time employment decreased 53,700 persons to 3,370,300.
• Unemployment decreased 3,800 (0.6%) to 629,900. The number of persons looking for part-time work decreased 4,100 to 177,600 and the number of persons looking for full-time work increased 300 to 452,300.
• The unemployment rate remained steady at 5.2%. The male unemployment rate decreased 0.2 pts to 5.0% and the female unemployment rate increased 0.1 pts to 5.5%.
• The participation rate decreased 0.3 pts to 65.2%.
• Aggregate monthly hours worked increased 5.6 million hours to 1,622.0 million hours.

So in effect total employment went down 0.3%, but so too did the participation rate and thus the unemployment rate stayed the same at 5.2%.

Now 5.2% remains very good historically:

I always like looking at that graph just to remind myself how damn lucky we are at the moment… and also to remind myself of what is was like in 1993 when I left uni and wanted to work for a living.

But let’s not get too happy about our current situation. Normally I would bother with looking at total employment on a graph because over a long term it doesn't say much useful, but a look at total employment since November 2007 does give a good view of how things are going:

In a word – flat.

Now a look at the changes in employment over the same period also give a good understanding of exactly where we are at:

The black line is the moving quarterly average and you can see it has be on or around zero since April 2010,m which is about as long a time as it was going along at that level during the GFC.

Now Tony Abbott might suggest this is all the failure of the Government but his response that "This is a very disappointing result, and it demonstrates how important it is that the government urgently gets debt and deficit under control" is not exactly credible, giving this figure has nothing to do with debt and deficit, and is just lazy. There is no evidence that the current budget deficit is causing job losses, and to suggest moving to a surplus will boost jobs requires a pretty idealised view of what a budget surplus can do. Our debt remains low, but the political concerns of returning the budget to surplus must remain  given these figures suggest tax revenue is more likely to be flatter than it is to be growing by the amount needed to get the economy going.

As ever the Australian economy remains dependent on the rest of the world, and overseas conditions remain terrible. The UK just hit  8.4% – its highest for 16 years – the US unemployment rate is just fell to 8.5%

We do have China on our side, but China is not immune to what happens in American and Europe. The world is interconnected – someone has to buy the stuff made in China for them to need to keep buying the stuff we have in the ground they need to make it. And with the dollar remaining high (get used to it) industries here such as tourism will continue to struggle.

So the upshot is to expect the RBA to move on interest rates.

Yesterday the market was factoring a strong chance of a drop. I do not expect that to weaken after these figures.

So not great news for the economy. Not terrible – we’re holding on, and as Possum has noted the drop in participation rate is somewhat expected to happen due to the aging population, and thus it is unlikely we can sustain the growth in that rate we have had over the past decades:

But the issues associated with that are long term and require a hell of a lot more than just a drop in the interest rate or some stimulus in the economy to alter…

Enough of the dismal science. Here’s some nice news from America about a young kid with Down Syndrome who has been used in advert by Target – adverts which make no mention of him having DS. You can read a bit of the backstory here from blogger “Noah’s Dad”