Much worse than it looks. From Westpac:
• Total employment growth has slowed to just 0.9%yr in the year to October (0.5% annualised over the last 6 months) and yet the unemployment rate has continued to drift lower even though the working age population has continues to grow at a 1.5%yr pace.
• This has been possible due to a decline in participation, particularly by males but more recently there has also been a drop in female participation.
• Generally when you have soft patch in employment you also get a moderation in participation and this appears to be the case in mining states of WA and Qld though even there, the drop in participation looks a bit overstated.
• In NSW, where employment is still positive, the decline in participation suggests we may be seeing a surge in retirees leaving the workforce particularly by males. Through 2015 stronger growth in female employment was associated with a strengthening in female participation but this has moderated in 2016.
• Victoria stands out with stronger employment growth, both male and female, and so more robust participation. But even there the rise in participation does not look as strong as could be given strength in employment.
• Weak hours worked in late 2015 provided something of a forward warning of the recent soft patch in employment. There has been a recent lift in hours worked per full-time and part-time employee. However, with employment growth focused on part-timers it is not a clear sign of a turning point as a rising share of part-time employees is a drag on estimates of average hours worked per person.
Big and bad implications here for Downgrade Morrison and his doomed Budget of Lies.