Thursday, March 13, 2008

February: One new full-time job every 18 seconds, and an unemployment rate below 4 per cent

A dramatic surge in new full-time jobs has pushed Australia's unemployment rate down below 4 per cent for the first time in more than three decades.

At 3.97 per cent, Australia's unemployment rate for February is the first to fall below 4 per cent since August 1974.

The unexpected result, released yesterday, represents an early achievement of a goal espoused by the former Prime Minister John during the November election campaign when he said there was no reason why Australia's unemployment rate should not have “a three in front of it”, although he added that that would not be possible “if Labor was elected with its anti-small business policies”.

An torrent of 47,663 new full-time jobs swept into the labour market in February, created at the rate of one every 18 seconds; 11,000 of them cannibalised part-time positions...

The Treasurer Wayne Swan welcomed the news telling parliament that “we celebrate jobs, we are the party of jobs, they go to the very core of our existence”. The Opposition spokesman Malcolm Turnbull declared the new record high in employment “the great economic legacy of the Howard Government”.

He said Australia’s economy had never been stronger or more resilient.

The news appeared to sit oddly with the results of consumer sentiment surveys released on Wednesday pointing to a collapse in confidence.

But the ANZ's chief economist Saul Eslake said the two pieces of news were not in conflict. Employment was a “lagging indicator”.

“If the Australian economy is now approaching, or at, a turning point, labour market data will be among the last of the important series to confirm that,” he said.

The ANZ bank, like Westpac, believes that teconomic growth is about to turn down and that the Reserve Bank's next interest rate move will be down, not up.

Last night the Macquarie Bank's Rory Robertson told his clients to expect the Reserve Bank to hold its nerve in the face of the booming employment numbers and to keep its rates “on-hold indefinitely”. He said the Bank knew that employment to continue to climb even after the economy had begun to “head south”.

The ACT gained an extra 500 jobs in the last 12 months, an annual growth rate of 1.1 per cent which is well below the Australian average of 2.7 per cent.

The ACT remains the state with the lowest unemployment rate in trend terms, again reporting 2.4 per cent, well below the next lowest states Western Australia and Queensland, with 2.8 per cent and 3.6 per cent.

New South Wales gained the bulk of the extra jobs in February, boosting its workforce by 18,000. Queensland boosted employment by 14,000 and South Australia by 5,600.

PS: Someone asked how to find out what the unemployment rate to two decimal places.

Here's how:

Go to the labour force page of the ABS website:

But instead of clicking on the "details" tab which will give you the
published document which has the answer to one decimal place (4.0 per
cent)... on the "related Information" tab.

- click on the first link "Labour Force, Australia, Spreadsheets -
6202.0.55.001 - Feb 2008"

- click on the "details" tab

- download the spreadsheet "6202.0.55.001 Table 02. Labour force
status by Sex - Seasonally adjusted"

Open the spreadsheet.

Click on "unemployment rate persons, seasonally adjusted"

Go to the bottom of the column, where you will see a figure that says "4.0"

Click on it, so that a box forms around it.

Look at the number that has appeared in the box at the top of the screen.

You should see that it reads 3.96973 etc...

Round that to two decimal places in your head. It comes to 3.97 per cent.