Monday, August 09, 2010

Is the government's apparent economic luck about to run out?

Labor is switching its focus to jobs ahead of employment figures due out Thursday likely to provide it with a life line ahead of its official campaign launch Monday.

All but 2 of the 20 market economists surveyed by Reuters expect Australia's official unemployment rate to come in at 5.1 per cent or less on Thursday. The only dissenters expect an updated rate of 5.2 per cent, a mere fraction above the present 5.1 which is the lowest since the outbreak of the financial crisis.

Addressing reporters in Brisbane after the Coalition's campaign launch Treasurer Wayne Swan said the election was really "about jobs".

"Who’s got the economic program to support jobs?" he asked. "Unemployment is 5.1 per cent and going down. If Mr Abbott had been in power unemployment would have been 200,000 higher."

A good unemployment number would cap off a dream run of economic news in the campaign period with the underlying measure of inflation slipping to its lowest point in three years... and the Reserve Bank deciding to keep interest rates on hold.

But new job advertisement figures out today suggest the employment gains are easing.

The Advantage Job Index which pools data from three online sites finds advertisements slipped a seasonally-adjusted 1.3 per cent in July led down by an outsized 4.2 per cent slide in the electorally important state of Queensland.

NSW advertisements slipped just 0.6 per cent and Victorian advertisements 0.1 per cent.

"Building and construction is a key industry for Queensland and a slide of advertisements of 13 per cent in that industry alone helps explain the state's poor performance," said Advantage director Robert Olivier.

"Given Queensland's ongoing woes, the government has some work to do to convince voters in the marginal seats to re-elect them."

The best performing industry in the past month was Advertising and Media with a 13 per cent
increase in online job ads, fed by a 45 per cent increase in such ads in the Australian Capital Territory.

"There seems to be a strong link between the advertising industry and the election itself," said Mr Olivier. "That being the case, we can expect many of those jobs to end post election."

Published in today's SMH and Age

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