Look beyond the latest jobs jump
Poll: In light of the March jobs jump, how do you view the current employment situation?
- It's getting better
- It's fairly stable
- It's getting worse
- Hard to say
Total votes: 7092.
You will need Cookies enabled to use our Voting Feature.
Poll closed 13 Apr, 2012
These polls are not scientific and reflect the opinion only of visitors who have chosen to participate.
The last jobs figures before the May budget have delivered two clear messages. First, the jobs market is not as bad as it looked a month ago, or even three months ago. And second, Australia is still a two-speed economy, with jobs growth happening mostly in the West.
Beyond that, these figures only add to the uncertainty as to whether the economy is poised to move up a gear, as the Government is forecasting, on the brink of slumping into recession outside the mining sector, or set to keep bumping along as it is, with mining growing strongly and the rest going sideways.
At face value, these look like strong figures. On the seasonally adjusted measures that people traditionally focus on, Australia added 44,000 jobs in March. Of those, 16,000 were full-time and 28,000 part-time. The unemployment rate remained at 5.2 per cent - up from 4.9 per cent a year ago, but steady in recent months.
The problem is that for the past four months, the seasonally adjusted figures have followed a zig-zag pattern: up one month, down the next. They fell sharply in December, bounced back in January, fell again in February, and now rose again in March. Anyone who focuses on the jump in March will be misled.
That is why the Bureau of Statistics tells us to focus on its trend figures, which smooth out the zigs and zags. Even they vary with the latest readout, but over the last six months they estimate that just over 25,000 new jobs have been created, all full-time, with unemployment flat at 5.2 per cent.
But those figures vary greatly from state to state. All of the net job growth and more was in WA, where 31,000 jobs have been added since September, almost all of them full-time. NSW has added just 6000 jobs, Queensland 4000, while Victoria has lost 23,500 jobs in the last six months, with unemployment rising to 5.5 per cent, from 4.8 per cent a year ago.
The trend unemployment rate is now just 4 per cent in WA and 3.6 per cent in the ACT, but 5 per cent in NSW, 5.1 per cent in SA, and an ugly 7.2 per cent in Tasmania, where a net 4000 jobs have gone in the past year, and there are more people but fewer full-time jobs than there were five years ago.
One further complication in interpreting the figures is that for technical reasons, they overstate the growth in the labour force in 2010 and understate it in 2011-12. That means jobs growth in 2010 was not as strong as the figures showed, whereas in 2011-12 the real jobs growth is better than the figures show - although still relatively weak.
The Reserve Bank knows all this, and today's figures will probably make no difference to the odds of an interest rate cut in May. Reserve governor Glenn Stevens made it clear last week that rates will be cut in May unless the inflation figures to be released on April 24 show a jump in underlying inflation. Financial markets are treating a rate cut as a virtual certainty.
The Government knows it all too, but for political reasons, it has locked itself into delivering a budget surplus in 2012-13. That will take $40 billion out of economic activity and run a serious risk of derailing what growth there is outside the mining sector. An Essential Research poll this week found only 12 per cent of voters support it in this, with 73 per cent wanting it to delay a return to surplus.
But today's jobs figures won't influence the budget outcome either, since the Government and the Opposition are united in treating the state of the economy as irrelevant to the goal of having a budget surplus.