Wall St was down 94 overnight, its biggest fall in a month, while the local market is down 66.
The good economic news just keeps on coming
|
The good economic news just keeps coming. This morning’s unemployment figures were not expected to point to any cataclysm in the job market, but to continue the steady rise in joblessness we’ve been witnessing — the March jump and its April correction aside — since unemployment hit bottom twelve months ago. And that’s what we got, but even smaller than expected. The trend and seasonally-adjusted unemployment rates increased from 5.7 to 5.8%, with a small fall in the participation rate which may have helped offset a bigger rise. What’s remarkable, however, is the sheer flatness of the numbers. No State recorded a significant change either in male or female unemployment or even participation rates. NSW up a tick to 6.6, Victoria to 6.0%, Queensland with the biggest jump of 0.2% to 5.4%. South Australia down slightly to 5.5%. The west up to 5.2% from 5.0%. Tasmania flat. The biggest fall in the participation rate was in the Apple Isle, with a 0.2% fall. Little evidence of the discouragement effect at work. This is an economy coping remarkably well with a collapse in its terms of trade and in business lending. Treasury’s predicted unemployment rate of 6% for the end of 2008-09 has thus been missed, and, barring another financial disaster or a tepid international recovery, there must now be real doubt that this time next year we’ll see 8.25% unemployment, as Treasury forecast back in May. Tuesday’s Fair Pay Commission decision will help prevent some of the workers most likely to be in the firing line from losing their jobs as well. Far more than GDP numbers or other indicators, unemployment is the measure of the real world impact of the downturn on working Australians. Each smaller-than-expected rise in unemployment means less social and economic damage and fewer long-term unemployed people than otherwise would have been the case. Given it’s only a few months since we were talking about depressions, and given that the rest of the planet is still struggling to halt the slide into mass unemployment, this is Miracle Economy stuff. |
|
|
12 Comments
Steve Keen from the University of Western Sydney (the only man in Australia to predict this mess http://www.businessday.com.au/business/for-predicting-the-slump-just-a-few-get-medals-20090703-d7vr.html) has a different take on the data coming out. His articles can be seen on his blog at http://www.debtdeflation.com/blogs/
It is “miracle stuff” but because we entered the GFC with an economy in surplus, with a flexible labour market, minimum trade union buffoonery, banks whose exposure to the American Housing bubble and CDOs was minimal, and a federal government intent on containing debt.
We now have an IR regime that every small and big business believes will add to labour costs, we have unparalled Commonwealth debt, which has to be repayed by Australians, and we have a financial sector where competition has been severely curtailed by a clumsy Federal government bank deposit guarantee, shielding banks from the demands of a competitive market by eliminating non bank competitors, which is exactly how Freddie Mac and Fannie Mae, shielded from the real market by a Democrat administration intent on achieving certain social goals, engineered the original ‘housing bubble’.
…”The good economic news just keeps coming”…
Thats a funny comment when teenage unemployment has now increased to 25%. Tell the full story please - not just the spun version.
Good on you Richard, John real party poopers. Just what the hell are you expecting in the current world economical climate. I realise it is impossible for you Libs to find anything at all that shows the country is weathering the storm better than any other of our OECD friends, but like your mates Turnbull the Mad and Hockey the Hated you delight in politicising the efforts of Government and the Reserve Bank to see this country through.
Just as the majority have seen through the Liberal lies and deceit of recent weeks they also will see the loathful comments coming from their supporters.
Dear oh dear, Bernard, I’ve already commented on your stablemate Glenn Dyer’s similar comments yesterday at http://www.crikey.com.au/2009/07/08/if-this-is-a-recession-the-figures-are-telling-lies/, surely that’s enough on the ‘miracle economy’ — the one that’s now $300bn in debt. It’s like having to pay the rent on credit cards — and we call that a miracle?
And I don’t think it’s a one-eyed partisan question, to be honest, David1.
There’s not much to be gained from a minute by minute, second by second breathless account of a few macro-economic indicators, given that the Great Depression took several years to develop to 30% unemployment and bread queues from the 1929 Wall St Crash. Every year another prop fell away from the world economies, another set of speculators came unstuck, and more flow-on effects kicked in. Rome wasn’t burnt in a day, you know.
21,000 more people out of work this month, unable to pay mortgages or rent. Wonder how the 20,000 finance workers in Sydney are faring finding new work at present? Plus the returning finance ex-pats from London, of course. Melbourne must be having similar difficulties. Not to mention all the commercial property development that is foundering — construction workers will be out of work soon too. And housing starts are down once more.
Etc, etc. Let’s look at ALL the doom and gloom indicators, not just cherrypick one or two plum statistics on a second by second reportage basis — not really analytical economics journalism, is it, more like the sensationalist colosseum tracking antics we’re used to seeing from second rate ‘political’ reporters in Canberra more interested in personalities and squabbles like spectator sport than the true state of the economy.
JOHN JAMES, what would a priest know about the economy?
SEAN, If the news is good but comes from a non-Liberal government it has to be bad. Right? However, if the news comes from a Liberal government, it has to be good. Right? Oh yes, laud it to the skies: don’t fret about women, children, and refugees being locked up in concentration camps. Right?
Please, neither of you come the old ad hominem argument. Because this is exactly what it’s meant to be.
DavidI. Good comment. I thought John James was a Catholic Priest? Well he’s certainly a Catholic. And full of sh-t.
My comment although not as eloquent as yours, encapsulates their thinking. But, as long as they have so little talent available to them that they persist with Malcolm the Mad and Joseph the Just-after symptoms of disorder, or the Angry Abbott is proof, set in concrete, of the older ones and Christoper Pyne the Petrified Emu is what ther have in store for the future. God help the Liberals, because few other people would help them.
Cheers Rasta. But if I want Steve’s views I can read the Eeyore bits of my Winnie the Pooh books.
As for people suggesting I’m gilding the lily, I’m amazed at how you’ve all forgotten that over summer there was serious talk of an extended and very deep recession that would cause massive unemployment and a collapse in house prices. A number of other economies, including that of the United States, are still experiencing that sort of crisis. The fact that six months later we are not is something worth celebrating.
And yes John “JJ Jeans, It’s a warehouse” James, one of the reasons is that we entered the downturn with a strong economy and some cash in hand, even if the budget was structurally in deficit. But the main credit goes to the RBA and the Treasury and the politicians who followed the advice of the latter.
Dr Harvey Tarvydas
Economics like science has an evolutionary dynamic stamping or underlining the ‘truths’ as they are exposed by these natural processes which will always obey the laws of nature before taking our human instructions.
Understanding them profoundly and honestly allows opportunity to influence but you have got to be right and spot on or no show.
Our PM Rudd had the guts to go in HARD and FAST thanks to a team that could advise and or go forward with top quality trust.
World leading economists in comparative global analyses have identified that speed/FAST was the most important in determining the eventual outcomes.
Howard’s ‘surplus’ even valued at 10 or 20 Billion is a little piddle to whats needed now for spending in the way PM Rudd is proposing.
Howard’s great contribution to our future recovery is not the ‘surplus’ but the not inadvertant $200 plus billion Aus infrustructure ‘deficit’ the fixing of which will save us and make our country new.
The US spending so much more but slowly (hey Turnbull) have missed the bus.
Dr Harvey M Tarvydas
Ooops, building the physical attributes of our great nation to something more perfectly great is a socialist plot? Yes? If the goverment is the only one still standing to do the job? If the activity is the exercise that will make us healthy?
Shoot the goverment with the right bullet from the right gun with the right hand.
The confused forget Stalin was a fascist not a socialist worse than that other fascist with the name starting with H, not Harvey.
Bernard Keane says:
Cheers Rasta. But if I want Steve’s views I can read the Eeyore bits of my Winnie the Pooh books.
I’ve read those bits in my 4 year old’s current literature, and they don’t sound the same as Steve Keen’s analyses. Can we try to be a bit more adult in our informed and detailed critiques of why an analysis might be perceived to be incorrect?
How does Keane and Dyer’s view gel with this article from today’s Business Age, We’re deaf to the economy’s screeching tyres, cited on Global House Price Crash, Australian forum, in particular mentioning the likely fallout from high and continuing unemployment levels. It’s hardly the longview to be looking towards the end of year or next year in the economy, surely?
Seems like strangely naive reporting from crikey to be honest. Seems well off the mark, and lacking crikey’s usual contrarian vision.