Australia’s Unemployment Rate in December– Steady at 5.8%

Today’s labour force figures demonstrated that sometimes economics is not about “good news and bad news”, sometimes it’s just all bad.

There really was nothing in today’s figures that holds any joy. But let us gird our loins and venture into the data.

Firstly the unemployment rate both seasonally adjusted and trend stayed at 5.8%

It was pretty close to 5.9% though. The seasonally adjusted rate came in at 5.845%, so about a hundred fewer jobs and the rate would be 5.9%.

But that said the trend rate was 5.79% which is a rock solid 5.8%.

A couple months ago I was hoping a bit of a plateau was beginning to appear, but alas, when we go in for a close-up the upward direction appears to continue:

The worst thing was this month employment actually fell. In seasonally adjusted terms employment decreased by 22,600, or 0.19%. As you can see the seasonally adjusted measure jumps around a bit, but even the trend growth was negative (just):

In annual terms things are still positive:

But that is small consolation, especially if we have a look at the past 20 years, and we see it is almost as bad as it was during the GFC, and only the 1990s recession had it worse:

And if we look at the 5 yearly jobs growth over the past 30 years, the picture isn’t much better (out of interest to get to a million jobs in 5 years, it’d need to get up to around 8.5%):

But the big problem is any job growth that there is, is in part-time work. On Twitter I posted a 3 year version of this graph, but here’s a 5 year one to give broader context – and what occurred during the GFC:

The drop in full-time work is not quite as bad as it was during the GFC (in trend terms at least), but it ain’t healthy at all:

Not surprisingly growth in hours worked is starting to go down, and when that goes negative you know we’re in bleak territory.

In 2012 the hours worked grew much slower than actual employment – suggesting an increase in part-time work and also more work being cut back than laid off. Now though they’re together:

As a result the growth in hours worked per person is also starting to decline after a bit of an increase in the middle of 2013:

This all adds up to an increase in the rate of people looking for full-time work:

After a slight decline in the gap between these two rates in the middle of last year, it has again widened. It’s not quite at the gap it was during the GFC, but neither does it seem to be peaking.

The employment to population ratio is also awful:

If we look at the historical view you can really see that a turning point happened in 2009-2010:

Most of this is due to the ageing population (I doubt we will ever see the 63% level again), but if you compare the total ratio to that of just 15-64yo you can see even percentage of those in the working age who are employed has also fallen (though this is also due to an increase in 15-24yos staying in education)

I might do a post on the states tomorrow, or I might save it for my next Guardian post because there are some interesting aspects when you break it down to state level, but I’ll leave you with this one graph which shows that Victoria now is the biggest anchor on the unemployment rate:

All in all, bleurgh. Who knew that a government coming in and saying they're open for business wouldn’t get turned around straight away. These figure aren’t the Liberal Party’s though. But the time to lay the blame on the ALP is fast running out for Hockey and Co.

October Employment Figures (some more graphs)

From my Guardian post I have start using Datawrapper for the graphs. They are a bit more interactive, though pretty basic. I actually prefer just using Excel for some graphs, especially when I am using 2 Y-axis, or I want to combine columns and lines on the same graph.

But here are a few graphs with Datawrapper:

I might use these a bit more in future

A different version of the above

Australia’s unemployment rate rises to 5.8%, or steady at 5.7% (take your pick)

The Monthly labour force figures came out today and they do little to suggest the Treasury's prediction of 6.25% by June next year will be wildly inaccurate.

In seasonally adjusted terms the unemployment rate in October stayed flat at 5.7%. Although given September’s rate was 5.6755% and October’s was 5.7442%, it was all down to rounding that kept the rate flat when in fact it increased 0.068 percentage points.

In trend terms, the rate rose form 5.7% to 5.8%. But here again rounding is at work. The trend rate in September was 5.74% and in October it was estimated to be 5.75%. So as a result of rounding it increases up from 5.7% to 5.8%, but in reality it only increased by 0.0106 percentage points.

So the seasonally adjusted version shifted by more than the trend measure but the trend rate “increased” while the seasonally adjusted rate stayed “flat”.

Don’t you just love economic statistics?

At this point we should remember these are estimations. The seasonally adjusted rate for example sees the ABS being 95% confident that the rate shifted somewhere between in falling 0.3 points and rising 0.5 points.

But that statistical rhubarb aside, let’s get to the graphs:

First the 10 year picture finds us back where we were 10 years ago. Now back then being below 6% was seen as an economic wonder. Now if it were to stay at 5.8% there would be grumbles about a weak economy (and reasonably fair enough).

The close-up 18 months picture has us aching to see a plateau. It does however highlight that we haven’t quite got the the 5.8% mark yet, and for use to get to 6.25% would require a speeding up of unemployment as was seen after the brief semi-plateau observed at the end of 2012:

But the story today wasn’t so much about unemployment as employment. The number of jobs in trend terms fell 0.036%

And it makes for a pretty ugly annual growth figure. Employment growth is heading back to the level we saw during the GFC. Who knew it took more than just saying “Australia is open for business” to get people hiring workers?

Although intriguingly the hours worked in the month increased:

But it appears to have peaked in annual growth terms:

And when we compared growth in hours worked with growth in employment it seems that perhaps this peak of growth in hours means the disconnect between the two measures that has occurred since mid-2012 is about to end

It also means for the first time in 6 months the monthly hours worked per worker did not increase in October

But while the story of the labour force figures was the lack of job growth the really interesting part of that story is the breakdown of full-time and part time employment growth:

Trend part time jobs in October grew (just) while full-time work fell for the 6 month in a row.

And this meant that for the second month in a row there are now fewer full-time jobs than there was 12 months ago:

The drop in full-time work has hit men the hardest:

But lets compare the FT/PT growth by gender:

For men the growth in part-time work is quite dramatic, for women it’s pretty standard:

Not surprisingly the lack of full-time work for men has kept the gap between the unemployment rate of those looking for full-time work and the overall figure at pretty ugly highs.

What is also concerning is that while yes you can blame some of the fall in participation on the ageing workforce, the percentage of 15-64yo in employment continues to fall (though again some of this can be attributed to the decline in youth employment due to them staying at school longer now. I really wish the ABS did a monthly 25-54yo breakdown to get “prime working age” figures – and yes I can work it out using the “detailed” figures that will come out next week, but geez, that requires work!)

For me though an interestingly little nugget I discovered is that for the first time in 30 years the proportion of women employed (15-64yo) is less than it was 5 years earlier:

After the surge of women into the workforce in the 1980s and the continual strong growth during the late 1990s and first part of this century the growth it has fallen rather dramatically. For an economy that has thrived on the increase in participation of women this might be the big issue – ie not just ageing, but have we reached the peak level of women workers? Is two-thirds of adult women working the highest we can get?

My guess is that while more women-friendly work places and the breaking down of discrimination has led to the increase in women working – mostly in part-time work. For the number to go any higher would require, I think, some fairly major changes of culture in terms of which parent stays at home.

Finally a quick look at the states. And break out the champagne you austerity champions, QLD has had the strongest employment growth of the past 12 months:

A look however at the past year suggests its position is due to a nice pick up in QLD and a big fall in WA and NSW. But at least QLD’s unemployment rate remains steady at 5.9%. Good news:

Australia’s Unemployment Rate steady at 5.7%

Today the ABS released the latest labour force numbers. I haven’t done a full post on the number for a couple month due to the election, so let’s have a look and see how we’re doing.

First off, the numbers scream “ignore the seasonally adjusted rate”. On seasonally adjusted terms the unemployment rate in September actually fell from 5.8% to 5.6%.

But come one. Really? Maybe it’s the big turn around, but given the IMF on Wednesday thinks we’re looking at a 6.0% unemployment rate next year (and Treasury is gloomier still, thinking 6.25%) I’d bet no.

In trend terms – which is always much better when it comes to comparing changes from month to month, it stayed flat at 5.7%.

And anyway if we get down tot he nitty gritty, the seasonally adjusted figure in August was 5.7647% so it only just got rounded up to 5.8%, and September’s number was 5.6479%, so it only just got round down to 5.6%. Thus while it looks like a 0.2 percentage point drop it’s really only a 0.12 percentage point drop.

So I’m going with the 5.7% flat rate as more believable.

OK, the 5 year picture:

We’re not quite back to where we were during the GFC, but the path back to 6.0% has been pretty steady since mid 2012.

So let’s go in for our 18 month close up:

A steady rise, but and ever so slight suggestion of a plateau. I think that plateau depends a fair bit on whether or not this month’s figures get revised a bit next time round.

But that’s the big number, let’s flip open the hood and have a bit of a squirrel around and see what is really going on.

First, monthly employment growth:

There was an increase of 9,100 jobs in seasonally adjusted terms, but employment actually fell in trend terms:

Either way, it’s pretty soft (and by soft I mean fricken weak) as the annual employment growth rate really shows:

The hours worked measure is also interesting. In seasonally adjusted terms it fell (even though the amount of jobs increased). But in trend terms it has been increasing for the past 12 months:

This translates into an annual increase in hours worked that seems a bit at odds with the employment picture:

But it makes more sense when we look at what has happened with both over the past few years:

Here we see is that in 2012 hours were cut back, but employment continued to grow – through hours of full-time work being reduced, and/or the growth in part time work exceeding full time work. It is not too bad a thing really – much better for hours to fall than for total jobs to – it is always easier to increase hours than to go from no job to a job (and also a sign of a nicely flexible IR system).

Now we see a bit of a counter balance. Clearly the economy is not going gang busters, but where work is able to be increased it is being increased through either shifting part-time workers to full-time, or increasing the hours of full-time workers.

I would suggest the space between the total employment growth line and the hours worked bars from June 2012 to July 2103 exhibits a lot of spare capacity in the labour market of those already employed.

I would suspect that the hours worked growth will need to stay above the employment growth for a few more months before we have any chance of seeing a good increase in employment.

As a result the Hours worked per employed has now risen for the past 6 months, but is still well below pre-GFC levels:

So there is some employment growth but not much, and what there is, is mostly part-time

But even the part-time employment growth is slowing as can be seen pretty starkly when we compare monthly full-time and part-time employment growth:

Not surprisingly the unemployment rate of those looking for full-time work remains well above the total rate:

The gap has narrowed a bit, but looking back over the past 10 years, we see the gap is as big as it has been outside the GFC period:

The Participation Rate has received a fair bit of attention today, and not surprisingly because it has rather dived in the past few months:

Now it is always worth remembering that the participation rate can fall for a couple reasons. The first is the most obvious – people have given up looking for work. But the second is why they have done that. For some it is due to despair, for other it is due to age.

The ageing of the population remains with us, and I seriously doubt we’ll see a participation rate ever again at the near 66.0% that it reached in late 201o.

Indeed a look at the past 20 years suggests 2008-2012 was a abnormal level rather than the expected to be norm.

One thing to note is that since November 2010 the total participation has fallen 0.8 percentage points, but the 15-64year old participation rate has only fallen 0.3 percentage points in that time.

People are getting old, more than people are getting discouraged. For a better look at the ageing dynamic, Matt Cowgill has some excellent graphs on it all. My very quick and dirty look at the impact of the ageing of the population is to compare the change in the total employment to population ratio and that of 15-64yo since April 2008 (the peak level).

While during the GFC the both rates fell and rose around the same, since the end of 2010 the total rate has fallen faster. And as we know 2010 minus 1945 is 65 – or the beginning of the retirement age for baby boomers.

(I really should use the 25-54 age bracket, as what we’re also seeing now is that 15-24yo are staying in school/uni/TAFE more than they sued to, which is also reducing the total rate somewhat).

OK, now onto the growth of employment for men and women. Usually I look at total employment, but let’s just look at full-time work:

For the first time since the GFC period, annual male full-time employment fell in the past 12 months. While full-time employment for women is holding up, growth has moderated in the past 12 months.

Not a really wonderful picture of economic health. Yes the unemployment rate went down, but let’s not get too excited, when full-0time work numbers start picking up, then we can begin to say the corner has been turned.