Labour loss: unemployment hits 6% for the first time in a decade
Unemployment has reached a 10-year high but the news from the ABS today wasn't all bad, Glenn Dyer and Bernard Keane write. Employers are hedging their bets on which way the economy will go.
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Australia’s unemployment rate has hit 6% for the first time since 2003 (though it’s come close a few times), with 3700 jobs estimated to have been lost last month. The overall tone of the figures from the Australian Bureau of Statistics was again patchy, with lots of gloomy signs, but also the odd glimmer of light.
Those glimmers — hours worked jumped over 1% (seasonally adjusted aggregate hours worked increased by 20.5 million hours to 1,635.8 million hours) and there were 3,400 more higher part time jobs (again, seasonally adjusted) — are both characteristic of employers undecided about the outlook for their business. As a result, they don’t know whether to hire, or fire – so more work is handed out to existing full time employees, or more part-timers are hired, while business wait and see how demand is going.
If it falls, firings start, if demand rises, then they slowly build up hours and move more people to full time work. With sackings to come in the car building and mining services sector, as well as among some sections of the service sector, its hard to know just how the labour market is placed at the moment. The Reserve Bank forecasts unemployment rising further this year, as does the government. But will it head past previous forecasts of 6.25%? That’s not necessarily assured — coupled with the continuing decline in wage growth, and what seems to be an upturn in business confidence and conditions there’s a chance that the small rise in part time work and the extra hours worked is a positive, not a negative.
The participation rate steadied at 64.5% seasonally adjusted — comparatively good news given we’ve got used to falling participation over the last couple of years, and it could be telling us that there’s a bit more confidence among workers about the jobs outlook, so they are still looking for work if they are unemployed.
New South Wales stayed steady at 5.8% unemployment, a good outcome given participation edged up a tad, but in Victoria unemployment rose 0.2 points to 6.4% — albeit on the back of a 0.2 point rise in participation. Queensland had a bad result — unemployment up 0.2 points to 6.1% despite a fall in participation of 0.3 points. Things were more positive for the election-bound governments of South Australia and Tasmania: in SA unemployment fell 0.2 points to 6.6%, although there was a 0.2 fall in participation; Tasmanian unemployment was steady at 7.6% despite a big rise (0.5 points, but it’s a small sample size) in participation. Over in the west, unemployment went up 0.5 points to 5.1% off a minimal rise in participation.
On a trend basis, which is designed to smooth out the month to month variations of the seasonally adjusted figures, the jobless rate remained just below 6% (but let’s call it that when the figure is rounded up). The trend participation rate eased to 64.5%, the number of hours rose to 1,622.4 million hours and the unemployed rate edged up to 717,700, not much above the reported level in December.