Unemployment

<p>EXPERT OBSERVER</p>

<p>Employment fell by 594,300 in April – the biggest monthly decline in jobs on record. Full-time jobs fell by 220,500 and part-time jobs fell by 373,800.</p>

<p>The unemployment rate rose from 5.2 per cent to 6.2 per cent in April – the biggest lift on record. It was the highest jobless rate since July 2015.</p>

<p>Hours worked fell by 9.2 per cent - the biggest monthly decline on record.</p>

<p>Participation rate: The participation rate fell from 66 per cent to a near 16-year low of 63.5 per cent – the biggest fall on record.</p>

<p>Spare capacity: In April, the underutilisation rate increased by 5.9 percentage points to a record 19.9 per cent. The underemployment rate increased by 4.9 percentage points to a record 13.7 per cent.</p>

<p>Unemployment across states in April: <a href="https://www.urban.com.au/new-apartments/nsw">NSW</a> 6.0 per cent (March 4.9 per cent); <a href="https://www.urban.com.au/new-apartments/vic">Victoria</a> 6.0 per cent (5.2 per cent); <a href="https://www.urban.com.au/new-apartments/qld">Queensland</a> 6.8 per cent (5.7 per cent); <a href="https://www.urban.com.au/new-apartments/sa">South Australia</a> 7.2 per cent (6.3 per cent); <a href="https://www.urban.com.au/new-apartments/wa">Western Australia</a> 6.0 per cent (5.4 per cent); <a href="https://www.urban.com.au/new-apartments/tas">Tasmania</a> 6.2 per cent (4.9 per cent); <a href="https://www.urban.com.au/new-apartments/nt">Northern Territory</a> 6.0 per cent (5.5 per cent); <a href="https://www.urban.com.au/new-apartments/act">ACT</a> 4.2 per cent (3.2 per cent). A record 221,500 jobs were lost in New South Wales; 129,500 jobs were lost in Queensland; and 127,100 jobs were lost in Victoria.</p>

<p>A raft of companies is affected by the employment data but especially those dependent on consumer spending.</p>

<p><strong>What does it all mean?</strong></p>

<p>If you went back a year ago, no one would have imagined that more than half a million jobs could be lost in the space of a month. The terms ‘unprecedented’ and ‘extraordinary’ are used regularly to describe the effects of COVID-19 on the economy. But when discussing the impact on the job market, the terms are appropriate.</p>

<p>What is happening in the figures is that almost 600,000 weren’t registered as employed in April – they didn’t work more than hour a week in the reference week. But those JobSeeker and JobKeeper recipients didn’t join the dole queue rather they “left” the workforce – they were neither employed or unemployed in the month. Rather the JobKeeper and JobSeeker beneficiaries stayed home, and waited for the economy to re-start so they could return to workplaces.</p>

<p>The fact that the jobless rate rose to 6.2 per cent and not 8.2 per cent is very positive. It shows that those on the sidelines are confident of returning to their jobs. The longer that an unemployed person stays out of work, the harder it is for that person to eventually find work. The great hope is that the job losses were only temporary and that the re-opening of the economy is indeed successful.</p>

<p>The best way to describe the impact of COVID-19 on the job market is in terms of the number of hours worked. Hours worked slumped by a record 9.2 per cent, and that accords with expectations that the economy will contract 10 per cent in the first half of 2020.</p>

<p>Many people have kept their jobs because of the JobKeeper program. So while those on the program are still ‘employed’ and deriving an income of sorts, they are not working, not adding to the output of businesses, and not adding to overall economic activity. The JobKeeper program keeps people connected to their employers, which is positive for the recovery phase. But the payments also ensure that people can spend and therefore serve to keep others in jobs and keep the economy moving.</p>

<p>The jobless rate is expected to peak near 10 per cent. And the Reserve Bank and Federal Treasury expect the economy to contract 10 per cent in the first half of 2020. But provided social distancing is maintained with good hand hygiene and significant COVID-19 testing, there is no reason that a ‘V-shaped’ economic recovery can’t occur as lockdown restrictions ease.</p>

<p>Looking ahead, the closure of our foreign borders will have a range of effects on the economy which also represents the value of <a href="https://www.urban.com.au/new-apartments">Buying Off-The-Plan</a>. Around 150,000 people come to Australia each year on different visas and do the jobs that Australians can’t or won’t do. If the jobs aren’t filled, then this could slow business output and economic output. But the absence, or reduced number, of migrants could serve to keep the jobless rate down if Aussies take up the jobs that they have shunned in the past.</p>

<p>The drop in jobs masks the impact - and future impact - on incomes. People have lost income and there is little hope for a lift in wages in the months ahead. Add in the deferral of dividend payments by listed companies and little or no interest income and there may be scope for ‘top up’ cash handouts by the Government.</p>

<p><strong>CRAIG JAMES</strong> is the&nbsp;<em><span>Chief Economist at CommSec</span></em></p>


cjames-5S2v74qSNK

Historic Aussie job market unemployment spike: CommSec's Craig James

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<p>EXPERT INSIGHT</p>

<p>The good news is that the job market recovery continues – and continues quite spectacularly. More jobs were created in the past six months than any similar period on record. Looking at March alone, the labour market results are truly awesome except for the drop in full-time positions – and that was a payback from the outsized gain in February. Unfortunately however, Aussies will remain sceptical on the speed and scale of the recovery for at least one more month – when the first month of post-JobKeeper data is published.</p>

<p>But it is a case of so far, so good. More people are looking for work, more people are finding work and the jobless rate continues its progress to pre-COVID levels. And while significant spare capacity remains, there were good gains made in the latest month on the measures of hours worked, labour under-employment and under-utilisation.      </p>

<p>Looking ahead, there is indeed the uncertainty about what is the ‘true’ state of the job market after JobKeeper. But reassuringly, all measures of labour demand including job ads/vacancies show that there are plenty of businesses looking for staff. In fact, SEEK has today reported the highest number of monthly job ads in its 23+ year history.  </p>

<p>There are plenty of jobs to be had, but will Aussies fill the available positions? That is the key issue for policymakers, and ultimately the economy. Ultimately if Aussies won’t take up the jobs on offer, then more specific attempts must be made to bring in foreign workers. Otherwise, economic momentum will be constrained.  </p>

<p>The Reserve Bank is expected to stick to its script for now, vowing not to lift cash rates until 2024. That determination to maintain steady rates has been reinforced today showing the consumer inflation expectations fell from 4.1 per cent to 3.2 per cent in April. But clearly plenty of water will flow under the bridge before 2024.</p>

<p><strong>What do you need to know? </strong></p>

<p>Employment rose by 70,700 in March (consensus: +35,000) after increasing by 88,700 jobs in February. Full-time jobs fell by 20,800 and part-time jobs rose by 91,500 positions. The number of people employed rose to a record high of 13.078 million.</p>

<p>The unemployment rate fell from 5.8 per cent to a 12-month low of 5.6 per cent in March (consensus: 5.7 per cent).</p>

<p>Hours worked rose from 1,762 million hours to a record high of 1,800 million hours (up 2.2 per cent) to be up 1.2 per cent over the year.</p>

<p>Participation rate: The participation rate rose from 66.1 per cent to a record high of 66.3 per cent in March (consensus: 66.1 per cent).</p>

<p>Spare capacity: In March, the underutilisation rate fell from 14.3 per cent to a 15-month low of 13.5 per cent. The underemployment rate fell from 8.5 per cent to 7.9 per cent – a 7-year low.</p>

<p>Unemployment across states in March: NSW 5.4 per cent (February: 5.6 per cent); Victoria 6.1 per cent (5.6 per cent); Queensland 5.9 per cent (6.1 per cent); South Australia 6.3 per cent (6.8 per cent); Western Australia 4.8 per cent (6.0 per cent); Tasmania 5.9 per cent (5.7 per cent); Northern Territory 5.6 per cent (4.9 per cent); ACT 3.4 per cent (4.1 per cent).</p>

<p>Employment across states in March: NSW (+14,700); Victoria (+6,100), Queensland (+23,300), South Australia (-600), Tasmania (+400), the ACT (-2,700), Western Australia (+32,600) and the Northern Territory (-1,600).  </p>

<p><strong>What are the implications for investors?</strong></p>

<p>One year on from the COVID lockdown and more Aussies are in jobs than ever before. Collectively Aussies are also working more hours than ever before. And the proportion of females employed has never been higher. We need to remember than when the jobless rate lifted to 7.5 per cent in May 2020, some economists were tipping that it would ultimately peak in excess of 16 per cent.</p>

<p>The economy has out-performed the ‘official’ forecasts from Federal Treasury and the Reserve Bank. If this out-performance remains significant then monetary and fiscal stimulus measures will need to be re-assessed. But that point is still some way off. Foreign borders remain closed, the vaccine roll-out is still slow and less than a month has passed since JobKeeper ended.</p>

<p>The record lift in jobs, together with the strengthening of job security will underpin consumer spending in coming months. And the desire to engage in retail therapy will be underpinned by the likelihood that the foreign border will be closed until much later in the year.</p>

<p>The improvement in the Western Australian job market is clearly a stand-out. The state led the nation in job creation in March and the jobless rate is the lowest for over seven years (since December 2013) – assisted in part by low population growth. The housing market will clearly be a key driver of the economy in 2021, courtesy of Building Bonus Grant and the HomeBuilder grant. In addition, the mining sector continues to be supported by solid demand and high commodity prices. Jobs growth in Queensland occurred following the announcement of the $200 travel voucher scheme, while interstate migration continues to support economic activity in the Sunshine State.       </p>

<p> </p>
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cjames

The number of people employed reached a record high in March: CommSec's Craig James

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<p>The rapidly improving labour market is likely to spur confidence and housing affordability, adding upward pressure to already strong house prices, according to Archistar chief economist Dr Andrew Wilson.</p>

<p>His comments come after the Australian Bureau of Statistics unveiled a sharp fall in jobless rates for February, to near-pre-COVID levels.</p>

<p>[smartcode_project:default project_id=27070]</p>

<p>“The unemployment rate has fallen sharply over February and is now remarkably within striking distance of pre-COVID shutdown levels, less than a year from the commencement of the pandemic.</p>

<p>“The ABS reports that the national unemployment rate seasonally adjusted fell sharply by 0.5% over February to 5.8% - the lowest rate since the pre-covid result of 5.2% recorded over March 2020.</p>

<p>“The number employed nationally has now almost recovered to pre-covid levels to be now down by just 1800 since March 2020."</p>

<p>[smartcode_project:default project_id=7758]</p>

<p>Dr Wilson noted all states reported falls in the jobless rate over February with QLD the best performer falling by 0.8%. NSW and VIC reported the lowest jobless rates at 5.6%.</p>

<p>“Capital city housing markets have recorded strong buyer demand this year so far with prices rising sharply – particularly in Melbourne and Sydney.," he said.</p>

<p>“And concerns over the possible significant negative impact on the economy of the tapering of the Job Keeper allowances at the end of this month will also likely to be to be misplaced – again.”</p>
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The rapidly improving labour market is likely to add upward pressure to already strong house prices, according to Archistar chief economist Dr Andrew Wilson.

jchancellor

Low unemployment to add upward pressure on house prices

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<p>Philip Lowe, the RBA Governor, has indicated the central bank's primary concern is employment, and those who don’t have a job and whose wages aren’t growing at sufficiently high rates. </p>

<p>"So to the extent that anything keeps me awake at night, that’s what worries me is the social and economic cost from a protracted period of unemployment. </p>

<p>"We know that low interest rates do push up asset prices, that’s part of the transmission mechanism. </p>

<p>"What would concern me, if we saw on the back of these rising asset prices, lending standards deteriorate and people go into the bank and borrowing ridiculous amounts of money in a speculative boom. </p>

<p>[smartcode_project:default project_id=29660]</p>

<p>"So this is why our focus is very much on making sure these lending standards remain sound because that would be a big problem if we saw a debt financed speculative boom in asset prices. </p>

<p>"We are not seeing that at the moment. </p>

<p>"The equity market is below its previous peaks, housing prices in Sydney and Melbourne, while they’re rising, they’re not really higher than they got to a little while back in some of the smaller capital cities. </p>

<p>[smartcode_project:default project_id=4939]</p>

<p>"In regional Australia housing prices are rising quickly, but there are fundamental factors at work here. </p>

<p>"So the issue is if prices are rising, are people borrowing responsibly and carefully? </p>

<p>"And to date they are," Philip Lowe concluded.</p>

<p>Lowe also warned that looser lending standards would increase the upward pressure on house prices and create financial risks.</p>

<p>“We are not at this point, but we are watching carefully,” he said.</p>
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The RBA Governor Philip Lowe has said he would be worried if Australians started “borrowing ridiculous amounts of money” in a speculative way.



Don't borrow ridiculous amounts of money: RBA Governor's warning to home buyers

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<p><img src="https://counter.theconversation.edu.au/content/81099/count.gif?distributor=republish-lightbox-advanced" alt="The Conversation" width="1" height="1"></p>
<p class="p1"><span class="s1">GUEST OBSERVER</span></p>
<p class="p1"><span class="s1">Many people assume Australia’s regions are getting a raw deal compared to the big cities. But beneath the oft-told “tale of two Australia's” is a more nuanced story.</span></p>
<p class="p1"><span class="s2">New research released today by the Grattan Institute</span><span class="s1"> shows that income growth and unemployment rates are not obviously worse in regional areas. Cities and regions both have pockets of disadvantage, as well as areas with healthy income growth and low unemployment.</span></p>
<p class="p1"><span class="s1">But shifts in population are driving a wedge between city and regional Australia. Fewer people are living in remote areas. And because of this, the economy is becoming more concentrated in cities and large regional centres.</span></p>
<p class="p2"><a href="https://www.propertyobserver.com.au/images/2017/08/03/Screen%20Shot%202017-08-03%20at%209.16.25%20AM.png" target="_blank"><span class="s1">Click to enlarge</span></a></p>
<p class="p2"><span class="s1"><img src="https://www.urban.com.au/images/2017/08/03/Screen%20Shot%202017-08-03%20at%209.16.25%20AM.png" alt=""></span></p>
<p class="p1"><span class="s1">Income growth was particularly high over the past decade in the mining areas of Western Australia and Queensland. But this is not just a mining-state phenomenon: average growth in income per person was similar in cities and regions across every state.</span></p>
<p class="p1"><span class="s1">Income growth was high in areas close to the centre of Sydney, Melbourne and Adelaide. But suburban parts of these cities did not fare so well – areas in Sydney’s west and Melbourne’s outer ring had some of the lowest income growth in the nation.</span></p>
<p class="p1"><span class="s1">The absolute level of income tends to be higher in the cities than the regions - but this has always been so. The highest taxable incomes in Australia are in Sydney’s eastern suburbs, followed by Cottesloe in Perth and Stonnington in eastern Melbourne. The only regional area in the top 20 areas by taxable income is the mining region of Pilbara in WA.</span></p>
<p class="p1"><span class="s1">The lowest taxable incomes are in Tasmania and the regions of the east-coast states, especially the far north coast of NSW, central Victoria and southern Queensland.</span></p>
<p class="p2"><span class="s1"><strong>Where unemployment is worst</strong></span></p>
<p class="p1"><span class="s1">Unemployment is not obviously worse in the regions than the cities, but both have areas of strong disadvantage.</span></p>
<p class="p1"><span class="s1">Parts of Far North Queensland have the highest rates of unemployment: 40% or more, compared to the national average of 6.1% in 2016. Most of these areas have had high unemployment rates for many years.</span></p>
<p class="p1"><span class="s1">Unemployment tends to be higher in large regional towns than in surrounding rural areas. In the capital cities, unemployment is concentrated along the “spines” - built-up areas that follow major roads.</span></p>
<p class="p1"><span class="s1">Unemployment got worse over the last five years in many areas where the jobless rate was already high. The unemployment rate increased in the northern parts of WA, the Northern Territory and Queensland between 2011 and 2016. Unemployment appears to be entrenched in these areas.</span></p>
<p class="p1"><span class="s1">Unemployment also got worse along city “spines”: the Ipswich to Carole Park corridor in Brisbane, and the Dandenong to Pakenham corridor in Melbourne. The exception was the Botany Bay to Liverpool corridor in Sydney, where unemployment improved but remains high.</span></p>
<p class="p2"><span class="s1"><strong>Population growth is much stronger in the cities</strong></span></p>
<p class="p1"><span class="s1">The regions are not noticeably falling behind in terms of income growth and employment. But there are big – and growing – differences in the location of economic activity and where people are choosing to live.</span></p>
<p class="p1"><span class="s1">A long-term trend in Australia’s economy continued in the past decade: fewer people are working in agriculture and manufacturing, and more are finding jobs in services. The loss of agricultural and manufacturing work is felt most keenly in regional and outer-suburban areas. And many service jobs – particularly professional services – tend to cluster in the centre of cities.</span></p>
<p class="p1"><span class="s1">Large regional towns exert a gravitational pull on the populations of smaller rural communities. Major cities have a stronger pull again, drawing younger and more-educated people from the regions as well as the majority of new migrants.</span></p>
<p class="p1"><span class="s1">This is evident in the population data over the past decade: in general, populations declined in small towns in the east-coast states and South Australia, but increased in larger regional centres. Population – and unemployment – also tended to increase faster in the towns along the east coast. Populations in the major cities, meanwhile, grew strongly.</span></p>
<p class="p20"><span class="s12">Voters in regional areas are <span class="s2">increasingly voting for minor parties</span>. It’s often suggested this is because of the <span class="s2">deteriorating economic position of the regions</span>.</span></p>
<p class="p1"><span class="s1">But given that people in regions have generally fared as well as those in cities over the past decade, major parties may need to look beyond income and employment to discover what is driving dissatisfaction among regional voters.</span></p>
<p class="p1"><span class="s2" style="font-size: 12.16px;"><strong><a href="https://theconversation.com/profiles/john-daley-1870" target="_blank" style="font-size: 12.16px;"></a></strong></span></p>
<p><a href="https://theconversation.com/profiles/john-daley-1870" target="_blank">John Daley</a><a href="https://theconversation.com/profiles/john-daley-1870"> </a>is Chief Executive Officer, Grattan Institute.</p>
<p class="p1"><span class="s2" style="font-size: 12.16px;"><strong><a href="https://theconversation.com/profiles/john-daley-1870" target="_blank" style="font-size: 12.16px;"></a></strong></span></p>
<p><a href="https://theconversation.com/profiles/carmela-chivers-390957" target="_blank">Carmela Chivers </a>is Associate, Grattan Institute, Grattan Institute.</p>
<p class="p1"><span class="s2" style="font-size: 12.16px;"><strong><a href="https://theconversation.com/profiles/john-daley-1870" target="_blank" style="font-size: 12.16px;"></a></strong></span></p>
<p><a href="https://theconversation.com/profiles/danielle-wood-147710" target="_blank">Danielle Wood </a>is Fellow, Australian Perspectives, Grattan Institute.</p>
<p class="p1"><span class="s2" style="font-size: 12.16px;"><strong><a href="https://theconversation.com/profiles/john-daley-1870" target="_blank" style="font-size: 12.16px;"></a></strong></span></p>
<p>All are authors for <a href="https://theconversation.com/au" target="_blank">The Conversation</a>.</p>
<p class="p1"><span class="s2" style="font-size: 12.16px;"><strong><a href="https://theconversation.com/profiles/john-daley-1870" target="_blank" style="font-size: 12.16px;"> </a></strong></span></p>
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jchancellor-FAypfDUnLy

Australia’s city/country divide is not as wide as you may think

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<p><img src="https://counter.theconversation.edu.au/content/57114/count.gif" alt="The Conversation" width="1" height="1">GUEST OBSERVER</p>
<p>New findings from the Cost of Youth Homelessness in Australia research project, released on Thursday, show the rising costs of health and justice services associated with homelessness.</p>
<p>The homeless young people in the study reported significantly higher prevalence of adverse health issues than the general population, or even compared to other unemployed, job-seeking youth. This created an average additional cost, compared to the unemployed group, of A$6,744 per person per year.</p>
<p>Homelessness also means considerably greater contact with and involvement in the justice system. This was an average cost of $8,242 higher than for the unemployed group. The total cost offsets for young people becoming homeless is therefore an average of $14,986 per person per year.</p>
<p>On the basis of the 41,780 young people between aged 15 and 24 who were clients of Specialist Homelessness Services in 2014-15 and presented alone rather than in a family group, the total annual cost to the Australian economy of additional health and justice services is an estimated $747 million – or $626 million annually more than for unemployed youth.</p>
<p>This $747 million exceeds the total cost – approximately $619 million – of providing Specialist Homelessness Services to the 256,000 people (young and old) assisted by the system over the same period.</p>
<p><strong>Has ‘early intervention’ influenced policy?</strong></p>
<p>Early intervention to arrest the onset of youth homelessness is not a new idea.</p>
<p>Debate about early intervention started in the 1990s following several research projects that proffered evidence that it was possible:</p>
<p>• it was advocated in a parliamentary report on youth homelessness in 1995;<br> • it was examined by a government taskforce in 1996-97; and<br> • after a pilot program, the first early intervention program for at-risk and homeless young people, Reconnect, was launched.</p>
<p>But apart from Reconnect, little has been done to develop Australia’s early intervention capacity. This is despite “youth homelessness” having had a visible profile in the media and in public debate. This is undoubtedly in large part due to the 1989 Human Rights and Equal Opportunity Commission inquiry into youth homelessness.</p>
<p>Twenty-five years later, an independent National Youth Commission Inquiry into Youth Homelessness revisited the same issue in much the same way. It found the problem had not been substantially redressed.</p>
<p>In December 2008, a federal government white paper placed “early intervention” on the policy agenda as a means of “turning off the tap”. But little was done in six years of Labor governments.</p>
<p>And, despite a roundtable on prevention and early intervention convened in 2014 by then-social services minister Kevin Andrews, the Abbott and Turnbull governments have done nothing to give effect to the framework so positively received.</p>
<p>Specialist Homelessness Services assisted 250,000 men, women and children in 2013-14. Nearly one-third (30 percent) were single individuals. Another one-third were sole parents with children (33 percent). Just less than one-third were other families (29 percent). The balance consisted of “other groups” of non-related persons (7 percent).</p>
<p>In 2013-14, of the 76,200 individuals who were alone when they presented to services, 44,414 were young people aged 15-24 years – or nearly six out of every ten single clients.</p>
<p><strong>Widening the debate</strong></p>
<p>The debate about responding to homelessness has too often been confined to claims about increasing homelessness services or reforming homelessness services. The overall costs and benefits are not considered. The huge demand-driven costs associated with young people becoming homeless are not factored in.</p>
<p>Policies that respond to homelessness in ways that avoid these costs have to be more seriously considered. Our report’s findings provide a strong economic rationale for investing in early intervention to stem the flow of young people into homelessness.</p>
<p>And for those young people who become homeless despite early intervention – or who were already living independently prior to homelessness – the policy imperative is to support them to exit homelessness as quickly as possible.</p>
<p>For these young people, this involves setting them up in safe, secure and appropriate housing quickly – or rapid rehousing.</p>
<p>A rapid and agile response has proved difficult to deliver because it requires quick access to some form of appropriate youth housing.</p>
<p>The most important issue is wrap-around integrated support for young people to remain in education, training or employment as a way of replicating – as well as can be achieved – the all-inclusive support that families provide.</p>
<p>Waiting for early intervention and an adequate response to youth homelessness feels like “waiting for Godot”, as the two homeless men did in Samuel Beckett’s famous absurdist play. But, as the findings of our research show, the Australian community and economy are paying the substantial cost of the status quo.</p>
<p><em><span class="fn author-name"><a href="https://theconversation.com/profiles/adam-steen-249616" rel="author">Adam Steen</a> is p</span><span style="line-height: 1.3em;">rofessor in finance, Charles Sturt University and author for The Conversation. He can be </span>contacted<span style="line-height: 1.3em;"> <a href="https://theconversation.com/profiles/adam-steen-249616" target="_blank">here</a>.</span></em></p>
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New homelessness report shows the cost of waiting for early intervention

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<p>GUEST OBSERVER</p>
<p>The April Labour Force report showed that labour market conditions remain okay, but momentum has slowed.</p>
<p>While labour market indicators remain mixed at the moment, we continue to expect the unemployment rate to remain close to the current 5.7 percent for the rest of the year.</p>
<p>Today’s numbers are unlikely to change the RBA’s view on the outlook; its focus has tilted more sharply towards inflation and we continue to expect another cut in the cash rate in August.</p>
<p><a href="/images/2016/05/18/Screen%20Shot%202016-05-19%20at%204.12.36%20PM.png" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/05/18/Screen%20Shot%202016-05-19%20at%204.12.36%20PM.png" alt=""></p>
<p>Today’s labour market report showed continued slowing momentum in jobs growth. Employment is now up just +0.1 percent 3m/3m compared with +0.9 percent three months ago. That said, the stability in the unemployment rate at 5.7 percent suggests that the labour market remains in good shape.</p>
<p>Some labour market indicators have been mixed lately. For example, ANZ job ads have been essentially flat for the last six months, and an unemployment rate based on welfare payments ticked higher in March. But indicators like capacity utilisation and profitability in the business surveys point to a solid labour market.</p>
<p><a href="/images/2016/05/18/Screen%20Shot%202016-05-19%20at%204.13.50%20PM.png" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/05/18/Screen%20Shot%202016-05-19%20at%204.13.50%20PM.png" alt=""></p>
<p>However, a preliminary read on our Fed-style labour market conditions index, which distils the common trend across a large number of indicators, was unchanged in April. This indicates to us that the labour market remains solid after last year’s sharp improvement was unwound. </p>
<p>RBA implications: While the RBA’s focus has shifted to the inflation outlook, as is always the case developments in the labour market are important for monetary policy deliberations. We think today’s numbers are likely to be broadly as the Bank expected.</p>
<p><a href="/images/2016/05/18/Screen%20Shot%202016-05-19%20at%204.14.03%20PM.png" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/05/18/Screen%20Shot%202016-05-19%20at%204.14.03%20PM.png" alt=""></p>
<p>That said, we continue to expect another 25bp rate cut in August given the sharp downgrade to its inflation forecast.</p>
<p> </p>
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Modest Australian jobs gain with steady unemployment: ANZ's Felicity Emmett

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<div>I took a look <a href="http://petewargent.blogspot.com/2018/06/unemployment-falls-to-54pc" target="_blank">here</a> at the employment growth figures during the week, which broadly showed that the unemployment rate in Australia is back down to where it was in 2013. </div>
<div> </div>
<div>The number of unemployed persons dropped sharply in the month of May, down by 26,800 to 714,600, taking the unemployment rate down from 5.6 per cent to 5.4 per cent. </div>
<div> </div>
<div>So that's the good news. </div>
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<div>The state making the most substantial inroads lately has been Victoria, with the number of unemployed persons down to 174,400 from 208,500 a year earlier.</div>
<div> </div>
<div>Very good news!</div>
<div> </div>
<div>The unemployment rate in Victoria has declined accordingly to 5.1 per cent, down from 6.1 per cent a year ago.</div>
<div> </div>
<div>So that's getting quite close to the 4.9 per cent of New South Wales. </div>
<div> </div>
<div>Like Sydney before it, Melbourne is enjoying the fruits of its construction boom.</div>
<div> </div>
<div>Some progress, then, but overall there are still more than 700,000 out of work, and there remains plenty of slack in the labour force nationally. </div>
<div> </div>
<div>A look at the trend chart for unemployed persons underscores this point.</div>
<div> </div>
<div>In October 2014 the two most populous states had a combined 442,900 unemployed persons, a figure that's since fallen by about 60,000 or 14 per cent. </div>
<div> </div>
<div class="separator"><img src="https://3.bp.blogspot.com/-wxFOA13nJc8/WyQxuec63KI/AAAAAAAAqkg/-i5Ua9cfvEAOpAUXxC42-sr0pzY3aOaDACLcBGAs/s640/A1.jpg" width="640" height="366" data-original-height="804" data-original-width="1400"></div>
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<div>Elsewhere, however, in aggregate there's been little meaningful progress. </div>
<div> </div>
<div>With regards to underemployment, the the trend rate declined to 8.5 per cent in May 2017, which is a bit below peak of 8.7 per cent seen in 2017. </div>
<div> </div>
<div>Meanwhile, the underutilisation rate also declined by 0.4 per cent to 13.9 per cent over the past year. </div>
<div> </div>
<div>Just about enough evidence here to suggest an ongoing improvement.</div>
<div> </div>
<div>PETE WARGENT is the co-founder of AllenWargent property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank">blogger</a>.</div>
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pwargent-M4siyDbqQY

Like Sydney before it, Melbourne is enjoying the fruits of its construction boom: Pete Wargent

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<div>The ABS released its Labour Force data for August 2015, which came in somewhat better than had been expected. </div>
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<div>The market had feared material downward revisions to employment figures following amendments to population growth assumptions, but happily in the event the impact was fairly benign.</div>
<div> </div>
<div>It is nevertheless worth looking at the revised data in the long run employment chart below to show the new shape of the chart...which is to say, essentially very similar.</div>
<div> </div>
<div>Total employment was revised down, but over the year total employment still increased by +235,000 or +2.0% (up from +1.8% in the year to July), an impressive headline figure and the strongest annual increase in the seasonally adjusted data series since April 2011.</div>
<div> </div>
<div>Handily this rate of employment growth is now far ahead of the rate of population growth, which following the latest Arrivals &amp; Departures (see link for more) figures I now estimate to be tracking at only around +1.3%.</div>
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<div><a href="/images/2015/09/11/A1.jpg" target="_blank">Click to enlarge</a></div>
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<div><img src="/images/2015/09/11/A1.jpg" alt=""></div>
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<div><span>Employment rose by +17,400 in August following an upwardly revised gain in employment of +39,200 in August, which is a fine result in the circumstances and well ahead of market expectations of +5,000.</span></div>
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<div><a href="/images/2015/09/11/LF3.jpg" target="_blank"><span>Click to enlarge</span></a></div>
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<div><span><img src="/images/2015/09/11/LF3.jpg" alt=""></span></div>
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<div><span>Full time jobs accounted for most of the monthly gains, and over the past year there have been more full time jobs created (+130,700) than part time positions (+104,200) - although as you can see below part time employment is taking a more significant role in the labour force than it once did. </span></div>
<div><span> </span></div>
<div><a href="/images/2015/09/11/A4.jpg" target="_blank"><span>Click to enlarge</span></a></div>
<div><span> </span></div>
<div><span><img src="/images/2015/09/11/A4.jpg" alt=""></span></div>
<div> </div>
<div> </div>
<div>
<div class="separator"><strong><span style="text-decoration: underline;">State versus state...&amp; the unemployment rate</span></strong></div>
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<div class="separator">The net employment gains in August were mainly accounted for by Queensland (+11,200) and New South Wales (+9,200), with the New South Wales economy adding a thunderous +118,800 jobs over the past year, more than half of the total for Australia, and overwhelmingly full time positions.</div>
<div class="separator"> </div>
<div class="separator">Victoria (+63,000), Western Australia (+22,100) and Queensland (+20,700) also added net employment over the past year, but South Australia has gone backwards over the same time period. </div>
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<div class="separator"><a href="/images/2015/09/11/A5.jpg" target="_blank">Click to enlarge</a></div>
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<div class="separator"><img src="/images/2015/09/11/A5.jpg" alt=""></div>
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<span>I have been warning here for at least a couple of years now that the longer this ugly dynamic continues and without a kickstart for the local economy the greater the fallout could be in terms of South Australian unemployment. </span><br><span><br></span><span>Amazingly there were more full time employed persons in Q4 2007 in South Australia than there are today. </span><br><span><br></span><span>The below graphic shows that while the New South Wales economy has added a stonking +267,200 jobs over the past five years, the two southern states combined have added essentially none. </span>
</div>
<div class="separator"><span> </span></div>
<div class="separator"><a href="/images/2015/09/11/A2.jpg" target="_blank"><span>Click to enlarge</span></a></div>
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<div class="separator"><span><img src="/images/2015/09/11/A2.jpg" alt=""></span></div>
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<div>That said, with the depreciating dollar the outlook for Tasmania has improved considerably over the past 18 months, and without sigificant population growth to be absorbed the trend unemployment rate in the Apple Isle has declined from a peak of 8.1 per cent in August 2013 to just 6.5 per cent today.<br><br>That's great to see.</div>
<div> </div>
<div>Unfortunately the same cannot be said for South Australia where the trend unemployment rate has spiked alarmingly from 6.6 per cent to 8.1 per cent and rising in less than a year. </div>
<div> </div>
<div>Concerningly it appears likely that there may yet be worse to come as the "Holden effect" takes its toll across the suburbs of Adelaide, with mining and manufacturing two of the worst hit sectors of the labour market.</div>
<div> </div>
<div>The unemployment rate in resources rich Western Australia has also continued to trend up to 6.1 per cent from just 3.7 per cent in June 2012. </div>
<div> </div>
<div><a href="/images/2015/09/11/a7.jpg" target="_blank">Click to enlarge</a></div>
<div> </div>
<div><img src="/images/2015/09/11/a7.jpg" alt=""></div>
<div> </div>
<div>
<div>New South Wales has been the clear standout despite soft regional employment growth, with low interest rates allowing the Sydney economy and housing market to fire on all cylinders. </div>
<div>
<br>At the national level despite some statistical noise along the way the trend unemployment rate has now been steady for the past 12 months at 6.2 per cent.</div>
<div> </div>
<div><a href="/images/2015/09/11/A6.jpg" target="_blank">Click to enlarge</a></div>
<div> </div>
<div><img src="/images/2015/09/11/A6.jpg" alt=""></div>
<div> </div>
<div>
<div>With the rate of employment growth comfortablt outpacing the rate of population growth, has the unemployment rate therefore peaked for this cycle? Perhaps, but the jury is still out on that one. </div>
<div class="separator"> </div>
<div> </div>
<div><strong><span style="text-decoration: underline;">The wrap</span></strong></div>
<div> </div>
<div>This was a robust result with the economy adding a sprightly +235,000 jobs over the past year and with corresponding important implications for monetary policy settings. </div>
<div> </div>
<div>Had the unemployment rate jumped higher as had been anticipated by some analysts prior to this release then the Reserve Bank may well have been inclined to pull the trigger on further interest rate cuts.</div>
<div> </div>
<div>Fortunately in the event the labour force figures were considerably better than had been feared and markets now appear fairly certain that interest rates will stay on hold at 2 per cent through October. </div>
</div>
<div> </div>
<div>
<p><span><em>PETE WARGENT is the co-founder of <a href="https://allenwargent.com/" target="_blank" rel="nofollow">AllenWargent</a> property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank" rel="nofollow">blogger</a>.</em><br></span></p>
<p><em>His latest book is <a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx" target="_blank" rel="nofollow">Four Green Houses and a Red Hotel</a>.</em></p>
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Unemployment falls back to 6.2%: Pete Wargent

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<h3 class="post-title entry-title"> </h3>
<div>The ABS released its Characteristics of Recent Migrants survey for November 2016 yesterday, a release which the statistician puts out every three years. </div>
<h3 class="post-title entry-title"> </h3>
<div>The anti-immgration lobby will be trawling through the figures to see whether migrants were taking all our jobs (go home, we're full!) or not working enough (bludgers!), but in the end the three-year change in the figures wasn't all that remarkable.</div>
<h3 class="post-title entry-title"> </h3>
<div>Most migrants are employed, including 82 percent of skilled migrants, while the unemployment rate for Australian born citizens at 5.4 per cent was comfortably lower than the national average.</div>
<h3 class="post-title entry-title"> </h3>
<div>The labour force participation rate for recent migrants and temporary residents remained high at 70 per cent, and 84 per cent reported that wages or a salary were the main source of household income. </div>
<h3 class="post-title entry-title"> </h3>
<div><strong><span style="text-decoration: underline;">Recent migrants head to capitals</span></strong></div>
<h3 class="post-title entry-title"> </h3>
<div>The system is broadly working as it should, then, while the recent increase in permanent settlers is largely accounted for by an increased refugee intake from Iraq and Syria.  </div>
<h3 class="post-title entry-title"> </h3>
<div>One significant trend which stood out to me was the clear acceleration in recent migrants with their usual place of residence in one of the capital cities. </div>
<h3 class="post-title entry-title"> </h3>
<div>Migrants have always preferred the capital cities, of course, but at 88.3 percent the figure has clearly been accelerating higher over the past dozen years to now sit at incredibly high levels.  </div>
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<div>Given that Australia's rate of immigration has also increased dramatically over the past dozen years this is potentially a hugely significant demographic trend.  </div>
<h3 class="post-title entry-title"> </h3>
<div>About 55 percent of Australia's population growth is presently accounted for by net overseas migration, while the other 45 percent relates to natural growth (being more births than deaths). </div>
<h3 class="post-title entry-title"> </h3>
<div>The trend towards capital cities holds true across all visa classes, but particularly so for those arriving as international students, a means of entry which is set to the most consequential driver of demographic trends.</div>
<div> </div>
<div><a href="https://www.propertyobserver.com.au/images/2017/06/14/B1.jpg" target="_blank">Click to enlarge</a></div>
<div> </div>
<div class="separator"><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/06/14/B1.jpg" alt=""></div>
<h3 class="post-title entry-title"> </h3>
<div>Looking at the geographical figures it becomes clear that since the peak of the resources boom Western Australia is not attracting or retaining recent migrants as successfully as it once was, while the southern states have not been retaining as many migrants as they might wish to. </div>
<h3 class="post-title entry-title"> </h3>
<div>The slack has been instead picked up by Sydney, and to a lesser extent Melbourne.  </div>
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<div><a href="https://www.propertyobserver.com.au/images/2017/06/14/B2.jpg" target="_blank">Click to enlarge</a></div>
<h3 class="post-title entry-title"><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/06/14/B2.jpg" alt=""></h3>
<div>Interestingly Sydney loses a chunk of its population each year interstate or to other parts of regional New South Wales, meaning that the residual population of Greater Sydney is heavily tilted towards overseas born residents. </div>
<h3 class="post-title entry-title"> </h3>
<div>Melbourne and Brisbane on the other hand are attracting migrants internally, and as a result absolute population growth is tracking at record highs in Greater Melbourne, and is picking up speed in Brisbane.</div>
<h3 class="post-title entry-title"> </h3>
<p class="p1"><span class="s1"><em>PETE WARGENT is the co-founder of </em><a href="https://allenwargent.com/"><span class="s2"><em>AllenWargent</em></span></a><em> property buyers (London, Sydney) and a best-selling author and </em><a href="https://petewargent.blogspot.com/"><span class="s2"><em>blogger</em></span></a><em>.</em></span></p>
<h3 class="post-title entry-title"> </h3>
<p class="p2"><span class="s3"><em>His latest book is </em><a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx"><span class="s2"><em>Four Green Houses and a Red Hotel</em></span></a><em>.</em></span></p>
<h3 class="post-title entry-title"><a href="https://petewargent.blogspot.com.au/2017/06/migrants-flock-to-capital-cities-stay"> </a></h3>
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