Saturday, April 14, 2012

Employment graphs. The zigs are getting bigger.

So maybe things are turning up. Maybe.

Here's the graph for the year to February:


It seemed ultra-flat, right?

Now, here's the graph for the year to March:



It looks better.

As Tim Colebatch puts it:

It was the fourth month in a row that the figures followed a zigzag pattern, falling and rebounding. But the rebounds have been bigger than the falls

To mangle a phrase from the 1980s, the zigs are getting bigger.

But not that much, not consistently, yet.

This chart from Leith van Onselen at macrobusiness shows that in the broad sweep of history employment grew rapidly up until late 2010 and has scarcely grown since:




This wasn't clear when the May 2011 budget was prepared, which is why the budget forecast an astounding (and now unreachable) half a million new jobs in two years.

It's the same for hours worked. We're scarcely doing any more, as this chart from Bill Mitchell makes clear:




Of course all this time the population has been growing, making the hours worked to population ratio look really, really sick, as this graph from the ACTU's Matt Cowgill indicates:




Here Matt Cowgill shows full-time employment growth has been seriously failing to keep pace with population growth. Not pretty, eh?




So, has the jobs market really sprung back to life? It's too early to say. And it is also too early to say that the reported gain of 44,000 in March even took place, given the nature of the ABS sample survey.

I doubt it myself. I would love it to be true. It would be tragic if if it turned out true and the May budget knocked the stuffing out of it.

Finally, when will we ever see the end of silly analysis like this (on Twitter):

"Great job Job figures. Only big surge in participation stopped jobless rate falling below 5.2%"

The big surge in the participation rate was not a surprise, independent of the of the extra jobs - it was caused by them. (Employment drives almost all of the participation rate, unemployment very little).

You can't accept one without accepting the other. The unemployment rate is 5.2%. Live with it.

Here's the long-suffering Chris Caton:

Bear in mind that monthly movements in the participation rate are simply an arithmetic reflection of movements in the estimates of employment and unemployment. The monthly movement in participation is otherwise devoid of informational content. Pay no attention to any analysis that suggests otherwise! If you don’t believe me, ask Peter Martin.



Related Posts

. Technical note: The employment-to-population ratio is sliding

. Bleak Christmas? For job seekers it was the worst in 20 years

. January: Jobs. Things aren't good, yet



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4 comments:

Anonymous said...

Hey Pete

Looking at Job vacancies and the Male E to P ratio it still looks pretty flat, although emp rate is still very high by historic standards. So demand hasn't ticked up yet and it looks as if employment is just keeping pace with pop growth.
I'd ignore ANZ job ads as an indicator of demand there are serious problems with the methodology..i.e multiple ads for one position.
A mate of mine has also played around with the Gross Flows and he reckons that employment will pick up as the negative trends away from employment (especially for men) have reversed.

The Lorax said...

Who tweeted that silly analysis?

There were some classics from Adam Carr on Thursday:

So far in 2012 - 75k jobs (Australia) have been created. 30k of those in full-time. Clear uptick in the pace of job creation

This is consistent with solid domestic demand growth. Unemployment rate remains at 5.2%despite jump in participation - 8mnths now at 5.2%

Hours worked rose too. People talking down Oz econ shld just shut-up - they know little.

It's sickening to think that there were people watching this number today, whose hearts would have sank upon seeing such a strong number.

There is something very seriously wrong with those people.

Anonymous said...

In the last week or so, job ads have dived in Qld as the new government implements a recruitment freeze.

Many contractors are currently employed in government agencies on contracts that will run out in June or before and will not be renewed. I am one of those contractors and things are really scary.

The point made by the reader above about duplication of job ads on the internet is very true. Not only do multiple labour hire companies advertise the same roles, but some job ads are repeatedly published.

Peter Martin said...

The Saturday Canberra Times is now full of ads for ASIO workers and not much else. ASIO can't possibly hope to employ that many people. They must be readvertisments, you would think.

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