Friday, March 09, 2012

Jobs. Flat as a tack with unemployment set to rise


Victoria: Down 27,700
NSW: Down 2200
South Australia: Down 1500
Tasmania: Down 1200

Western Australia: Up 22,900
Queensland: Up 7400
Northern Territory: Up 3400
Australian Capital Territory: Up 2700

Trend change in employment since August
ABS 6202.0

Australia's jobs market is as flat as a tack and unemployment is set to rise.

Jobs minister Bill Shorten yesterday predicted “further softness” after news that on a trend basis Australia has been putting into work just 1000 more Australians each month.

The trend has fallen below population growth, meaning Australia’s potential teenage and adult labour force is climbing 18,500 per month while the number employed climbs 1000.

In February the unemployment rate climbed from 5.1 to 5.2 per cent. Treasury predicts 5.5 per cent by June.

Mr Shorten said Australia still compared well to the rest of the world.

“Whilst Japan has slightly lower unemployment, the Germans, the Americans, the English, in fact the whole euro region, has unemployment much higher than Australia,” he said.

“So we are relatively well placed, but we still expect further softness in the unemployment numbers in coming months.”

Businesses were “understandably being more hesitant in their hiring intentions in a more uncertain global environment,” and were preferring to offer more hours rather than hire more workers.

But the Bureau of Statistics figures show the trend in the number of hours worked falling for the past six months.

The May budget forecast of half a million new jobs over two years now looks completely unrealistic. Nine months in to the forecast period only 7000 more Australians have been put into work - a rate of job creation so low it would take decades to meet the budget forecast.

The weak total hides an enormous disparity between the coal, iron ore and gas mining regions and the rest of Australia where the bulk of the population lives... Western Australia is taking on extra workers at the rate of 5500 per month. The rest of Australia is shedding workers at the combined rate of 4500 per month.

Victoria is by far the worst performing state, losing 27,700 workers in six months. By contrast NSW lost 2200, South Australia 1500, and Tasmania 1200.

The mining states took up nearly all the slack, Western Australia gaining 22,900 workers, Queensland 7400, and the Northern Territory 3400. The ACT gained 2700.

The job news mirrors the national accounts which Wednesday showed the Western Australian and Queensland economies soaring at annual rates of 11 and 10 per cent compared to 2 and 1.6 per cent in NSW and Victoria.

Mr Shorten said the disparity underlined the importance of the car industry, suffering at the hands of the high dollar.

Victorian premier Ted Baillieu should be “on the phone to Coaltion leader Tony Abbott saying: we hear what you say about trying to plug a $70 billion black hole in your own finances as the opposition, but please don't do it at the expense of Holden and Ford”.

Greens member of parliament Adam Bandt called on the government to quarantine Australia’s south-east states from cuts in the May budget, saying the cuts needed to come from the mining states.

He said the government should consider a “south-east stimulus package” funded by lifting tax rates on Australia’s most profitable companies or by “a proper mining tax”.

National Australia Bank senior economist Spiros Papadopoulos said by itself the weak employment numbers would not be enough to get the Reserve Bank to cut rates, but they would be “another contributing factor’.

Mr Shorten said the Reserve Bank’s cash rate of 4.25 per cent was high enough to give it plenty of “sea room” to cut.

“We have is a lot of sea room, which frankly other nations would love to have. So I do believe the Reserve Bank - it is independent, of course - it understands that we've got 4.25 points of sea room and I think that's a great advantage in our economy at the moment.”

In today's Canberra Times, Sydney Morning Herald and Age

Related Posts

. Memories. February 2008: One new full-time job every 18 seconds, and an unemployment rate below 4 per cent

. November 2011: Standstill. We are no longer making enough jobs

. January 2012: Jobs. Things aren't good, yet