Well, the white collar recessionists at The Sydney Morning Herald and The Age (and The Australian Financial Review, in catch up) will be a bit baffled by the December jobs figures, which had a bit in them for everyone.
On the one hand, the Australian Bureau of Statistics revealed the jobless rate was steady at 5.2% seasonally adjusted. But the number of people employed fell a sharp 29,300 in December.
Some 53,700 part-time jobs were lost. That’ll be manna from heaven for the gloom’n’doomsters.
But partly offsetting that was a solid rise in full-time work of 24,500. And there was a 5 million increase in the number of hours worked to 1.622 billion in December. This is a mixed bag of data, at worst.
The most concerning stat is the participation rate: it fell noticeably to 65.2 in December, down 0.3 percentage points from November. That’s a sizeable fall. The ABS reported the number of people unemployed fell 3800 people to 629,900 in December. That would appear to reinforce the participation rate fall — a sign that some people have been discouraged enough by the doom and gloom talk to stop looking for work.
But drill down into the state-based data and it gets more confusing. At a state level, nothing really happened, in trend terms, except in Tasmania. NSW and Queensland remained steady at 5.4% and 5.6% respectively. The participation rate edged down 0.1 of a point in Queensland but was steady in NSW. Western Australia was steady at 4.3%; it too lost 0.1 of a point on participation. Unemployment in Victoria edged up 0.1 to 5.4%. Only in Tasmania was there a big jump in unemployment — 0.3 of a point to 5.9%. But there, participation actually rose 0.2.
The state-based data is very much steady-as-she-goes stuff, even accounting for it being trend numbers. Once we get industry-level data in a couple of months’ time we’ll have a clearer idea of where the falls in employment were.
In the meantime, we have to guess. The ABS explained the fall in part-time work with “the decrease in seasonally adjusted part-time employment was driven by weaker than usual growth during the December period, which was particularly noticeable for women aged 15 to 24”. (Falls in part-time work always tend to hit women harder than men.) Forget the white-collar recession being pushed in some newspapers — maybe there’s a Facebook recession.
Perhaps the fall in part-time work among women was retail staff being laid off because of the sluggish demand in department stores and footwear and clothing businesses, as well as the likes of the ANZ, Westpac and the Commonwealth reducing branch staff via what they charmingly call “full-time equivalent positions” — sacking two part-timers to cut one full-time job. That’s how division managers, heads, chief financial officers and CEOs make sure of their bonuses and short-term performance KPI are met in times of weak demand.
In construction, however, there’s no mixed signals. ABS data on construction and on engineering construction showed non-residential construction going gangbusters while housing continues to flag. You know what that means by now: the mining sector is roaring along while residential construction is in a coma. That’s exactly how the RBA wants it currently: we can’t afford both sectors to be booming at the same time, not if we want to keep a low-inflation, low-interest rate environment.
This will all be (mis)interpreted through the prism of the next RBA meeting in February. Plenty of analysts are convinced another rate cut — maybe even 50 points — is a done deal. The shenanigans in Europe might yet make that the case. But it’s a stretch to argue employment data seals the deal. Jobs growth isn’t booming, but the Hanrahans have to be highly selective in picking the bases on which they reckon we’re rooned.