Solid employment in detail

By Leith van Onselen

As The Prince reported earlier, the Australian Bureau of Statistics (ABS) this morning released the labour force data for the month of April, and like last month’s print, it is very good.

In seasonally adjusted terms, total employment increased 15,500 (0.1%) to 11,501,000. Full-time employment decreased 10,500 (0.1%) to 8,062,800 and part-time employment increased 26,000 (0.8%) to 3,438,200..

The below chart shows the changes in these components since April 2008. As you can see, this month’s employment gain of 15,500 persons caps-off two good months for the Australian labour market. The only caveats are that last month’s gain of 44,000 persons was revised down in this release to 37,600 and the economy shedded 10,500 full-time jobs in April.

The total level of employment in Australia has again reached an all-time high, surpassing last month’s peak:

On a rolling annual basis, employment growth was 0.60% in April, and has clearly recovered from the low of -0.01% reached in December 2011:

Despite the creation of 15,500 jobs – and increase of 0.1% – the headline unemployment rate fell by -0.3% to 4.9%. This is primarily because the labour force participation rate fell by -0.2%, accentuating the employment gain (see below chart).

Australia’s labour force participation rate is now -0.8% below the peak level reached in November 2010:

Another positive from the release is that the aggregate number of hours worked rose by 6.6 million hours in April, and has risen for the past three months:

The annual change in aggregate hours worked has also turned sharply positive – up 2.6% in the 12 months to April 2012, with Western Australia leading the charge (up 10.6%):

At the state level, Victoria (+23,200) and Western Australia (+6,800) created the most jobs over the month, whereas New South Wales (-23,800) lost jobs:

Over the year, however, Western Australia has dominated, contributing 70% of Australia’s new jobs:

Reflecting its status as Australia’s resources capital, Western Australia has by far the lowest unemployment rate in the nation (3.8%). By contrast, Tasmania (8.3%) and Victoria (5.3%) are the laggards.

So overall it’s an unequivocally strong result, which must count against the Reserve Bank of Australia further lowering interest rates at its next meeting. The official ABS result also continues the divergence between it and the unofficial Roy Morgan measure (more on this later).

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Comments

  1. The participation rate seems to be a very important factor. I was just checking out SA figures, and saw that in Apr 2011, there were 821.3 thousand employed persons, for an unemployment rate of 5.4%. Then in Apr 2012, there were 818.5k employed persons for an unemployment rate of 5.2%. Do I cheer because of the lower unemployment even though there are several thousand less jobs in the state?

    • Unfortunately state by state is subject to people moving interstate, far easier than moving overseas. Looking at Seasonally Adjusted for Australia as a whole:

      April 2012
      Employed: 11,501,000
      Unemployed: 598,200
      Total: 12,099,200
      Participation rate: 65.2%
      Implied total eligible: 18,557,055

      April 2011
      Employed: 11,436,500
      Unemployed: 583,000
      Total: 12,019,500
      Participation rate: 65.6%
      Implied total eligible: 18,322,409

      So there are:
      (1) 64,500 more people employed
      (2) 15,200 more people unemployed
      (3) 79,700 more people in the workforce
      (4) 234,647 more potential

      Meaning 154,947 people either left the potential workforce or didn’t chose to join it.

      • For comparison purposes –

        Roy Morgan Apr 2012
        Employed: 12,307,000
        Unemployed: 1,149,000
        Total: 13,456,000

        (no participation rate that I could find?)

        April 2010
        E: 11,025,500
        U: 628,100
        T: 11,653,600
        PR: 65.2%
        ITE: 17,873,620

      • The participation rate is a strange concept. If unemployed people decide not to look for a job what does that even mean? How do they survive?

      • Alex Heyworth

        Either get supported by other family members/relatives, spend their savings, get a cash in hand only job or rely on government handouts of one form or another.

      • In my mind this concept is not giving us anything. EG taking it too its most absurd, if all the unemployed decided one month to do this then we’d have U/E of zero. If someone is unemployed the you dont need to ask them if they are looking for work unless they have won tatts.

      • In my mind this concept is not giving us anything. EG taking it too its most absurd, if all the unemployed decided one month to do this then we’d have U/E of zero. If someone is unemployed then you dont need to ask them if they are looking for work unless they have won tatts.

  2. “At the state level, Victoria (+23,200) and Western Australia (+6,800) created the most jobs over the month, whereas New South Wales (-23,800) lost jobs:”

    So Victoria was the powerhouse of job creation, far outstripping even the ming states?

    Sounds to me that there is good reason that the ABS stresses that the survey has a margin of error.

  3. Good numbers. I can honestly say I know no one at all who has lost employment or is out of work (voluntarily). The Vic number is a bit of a surprise but makes me think all this negative news is, thus far, noisy apprehension rather than fact.

    • Even with all the negative headlines it needs to be remembered that the government deficit was $40bn+ this year and, even though it is at a low level, private sector debt is still expanding.

      These two facts are quite important in regards to employment over the last FY.

    • Speaking of noisy apprehension. What are the interest rate cutting cultists going to do now?

      Hardly a compelling case for driving more cheap money through the economy.

      Heaven forbid that debtors pay a reasonable price to use the savings of others.

      As Ben Franklin sort of said

      ‘why disleverage today what you might get around to disleveraging tomorrow’

    • Full-time employment is down, mainly due to people giving up looking for work, so how can they be ‘good numbers’?

  4. Just had lunch with my former employer – a partner of a small to mid sized accounting firm in Melbourne and they are struggling to fill positions at the moment.

    They do not do insolvency either.

    That said he did have a few clients who are struggling financially but most are going fine, not great but fine.

    There is a chance Australia might survive after all, which is a good thing for all of us.

    • Tell them to advertise their positions with the ORS Group (Sydney). They’re a JobService provider for CentreLink and have an influx of Accountants registering with them unable to find work.

      They’ll fill those positions in no time.

    • Well the job market for accountants in Australia is a bit weird, too segmented me think. There are accountants in practice and in business. The practice ones also have their own sub-segments i.e. Big4, mid-tier and small firms. Then, the business ones were further segmented to industries, business sizes, listed v. non-listed, local v. global firm and public v. private…go figure.

      In practice it is hard to move from one accounting job to another unless you’re lucky enough to be in most-needed segment like mining or financial services in the past. The other weird thing is somehow the ones from Big4 acct firms are regarded as the best candidates in almost every situation. I have to admit while I myself have many years experience with multiple Big4 firms, this is just another BS / myth in the market.

  5. So MineBot, if you take these numbers at face value, we have unemployment below 5%, inflation under control, interest rates falling, GDP growing (weakly, but better than most places), low government debt, and now a budget surplus. You’d have to say the Gillard government is doing a bang up job!

    I mean, you can’t have it both ways, either the economy is doing poorly and Gillard deserves to be booted out, or the economy is doing extremely well and Gillard deserves to be re-elected.

    FWIW, my view is the Gillard government has totally capitulated to the mining lobby, and had failed the majority of Australians who live in the south-east. For that alone they deserve to get the boot. Abbott will be worse, but the sooner Abbott is elected the sooner he screws up and the Libs install Turnbull.

    • the sooner Abbott is elected the sooner he screws up and the Libs install Turnbull.
      A dicey proposition. The Libs are famously loyal while in government.

      • russellsmith55

        I wouldn’t vote for Abbott in the hope he’ll then get rolled by Turnbull later on.

        But on the same note, to get Abbott rolled all we probably need to do is start forcing the current liberal team to actually state their policies instead of just giving vague ideas and attacking the current government’s one. The MSM lets us down again.

      • Chris Uhlmann was going after Hockey on 7.30 on Tuesday night, to be fair – asked when we would get more than an “aroma of policy”

      • Waynes Black Swan

        The Libs don’t have to do anything so long as the Gillard government lurches from one disaster to the next giving the MSM plenty of daily headlines while taking the policy spotlight away from the. Suspect when the election is called, the MSM look to the Libs and their lack of policy will become apparent. Be interesting to see if Abbotts budget reply tonight has any substance.

      • I wouldn’t vote for Abbott in the hope he’ll then get rolled by Turnbull later on.

        Hell will freeze over before I vote for Abbott, but an Abbott government is inevitable. Lets just hope its short-lived.

        If Abbott is elected just as China implodes and the Great Aussie Housing Bubble bursts, I can’t think of anyone who be more deserving of such economic circumstances!

      • Waynes Black Swan

        Australia will get the government they deserve with Abbott and Hockey. Sadly, there is no viable alternative. Turnbull will give me a reason to vote for the Libs and not an Independent.

    • The Gillard Government should be booted out for a range of reasons: ethical, moral and fiscal. That the boom continues to trickle through the economy is no thanks to this government.

      The Gillard Govt “failed the majority of Australians who live in the south-east”.

      Employment numbers in Vic would suggest otherwise!

      • Employment numbers in Vic would suggest otherwise!

        You might be the only person in Australia who believes them.

      • Well, 3d1k and the poster above who actually lives in the state and mentions a partner in a mid-size accounting firm who can’t fill positions and who’s clients are on the whole doing just fine.

  6. It is good news indeed, certainly confuses the messages we have from elsewhere. Interesting to see what the RBA will do with this and the discussion around it.

    Looking at unemployment in the US, it is certainly possible for unemployment to go lower while house prices continue to fall.

    http://data.bls.gov/timeseries/LNS14000000

  7. Anyone wonder if this is due to early retirements? Boomers hitting their 60s (think about it: mid-1952 is now the line for 60) choosing to drop out of the workforce?

    • russellsmith55

      Its true of quite a few I know in that age bracket. They get the DSP until they’re old enough for the pension. Easy to get the DSP too as old people have all kinds of things wrong their health anyway.

      Maybe we’re a bit french after all, with people retiring at 60. If this is the case I can’t see it as being a positive thing in the long-run.

      • Well, we know the dependency ratio is going to go up in future anyway – the question is how soon that’s going to come around. Personally, I wouldn’t mind a few of the old fogies taking retirement to leave some room for us youf to take the reins 😛

    • I think this is very unlikely given the spanking their super balances have taken since 2007.

      Anecdotally all the stories are about older workers putting retirement off.

    • This is possible: migrant professionals get tired looking for jobs and decided to return to home-country and voila… you have lower participation rate.

  8. russellsmith55

    Does this unemployment figure mean that I can have my 0.5% interest added back on my UBank saver?

  9. “The official ABS result also continues the divergence between it and the unofficial Roy Morgan measure (more on this later).”

    This I am very much looking forward to, right now with all the conflicting data I couldnt be more perplexed.

  10. How does a breakdown by sector look?

    Is there any relationship between this result and the strong spike in retail in the same month? And didn’t we see this in March last year as well?

    Would have thought that if retailers are going to try and rapidly offload heavily discounted stock as fast as possible, some extra casual/temporary hands would be required. The job gains were all in the part-time side, I assume that since the ABS only uses two classifications, part-time includes temporary and casual? Maybe the employment results in the awful April PSI were not an outlier?

    The RBA would have had prior knowledge of both this result and the retail sales result and yet they still cut by 50bp.

    Will CoFEE (Bill Mitchell) show an improvement or stabalisation in teenage unemployment for April?

    Food for thought huh?