You have to look through today’s confusing Labour Force figures from the Australian Bureau of Statistics to get a true sense of the worsening state of the labour market.
It’s definitely going sour, the sharp rise in the unemployment rate to 4.8% last month from 4.5% in December gives a clue. It was the biggest rise for some time. But there has been a sharper, 0.7% rise from January, 2008, when the unemployment rate was 4.1%.
Look back to the way the number of unemployed has risen in the 12 months from January 2008. The slowing pace of economic activity has definitely pushed the number of jobless up significantly over the year. Unemployment has risen by around 84,000 people from January last year to last month: from 456,100 to 540, 200 last month.
That, according to the ABS, was a rise of 18.4% from January last year, to last month.
Growth in the labour force has slowed from well over 2.5% to just 0.9%. Australia needs growth of around 2.3% a year to stop unemployment from rising. Federal treasury last week said that unemployment was expected to grow by around 300,000 over the next 18 months and peak around 7%.
Looking at the jobless numbers over the 12 months gives a better understanding of the way the economic slowdown is affecting employment, despite what again appears a skewed result from the ABS’s latest figures (using a smaller sample).
The ABS said that overall employment last month “increased by 1,200 to 10,742,100. Full-time employment increased by 33,700 to 7,670,700 and part-time employment decreased by 32,600 to 3,071,400.”
Unemployment “increased by 36,800 to 540,200. The number of persons looking for full-time work increased by 29,900 to 381,300 and the number of persons looking for part-time work increased by 6,900 to 158,800”
The participation rate rose to 65.5 in January, up 1% as more people seemingly looked for work. This doesn’t quite sit properly with yesterday’s consumer confidence figures which fell for a second month, and remain negative.
With the 0.3% rise to 4.8% in the unemployment rate, the male rate was higher; 4.9%, than females on 4.7%. More females were employed in January, compared to January, 2008 and slightly fewer men were in employment.
The market had been expecting a loss of jobs in January: most forecasts had centred on a fall in total total employment of around 18,000, a jobless rate of 4.7% and a participation rate of 64.9%. Inexplicably the ABS says 1,200 jobs were added.
Still even at 4.8%, the Australian jobless rate is still significantly less than the 7.6% in the US. Japan’s rate has started surging, hitting 4.4% in December, from 3.9% the month before. Rates in Europe are well over 7 and 8%, in Spain it’s double digit.