Roy Morgan has released it June unemployment measure and its another big jump to 9.7%. RM measures unemployment differently to the ABS in that they consider the underemployed as unemployed, whereas the ABS will not count you if you’ve done one hour of work in the month. Of course as well the ABS is seasonally adjusted and RM is not.
I’m not judging either measure here and a glance at the two measures shows that in trend terms they have correlated well, until the beginning of this year. My explanation for the divergence is that there is a growing amount of underemployment being picked up by RM and missed by the ABS as I reckon Australia has a kind of informal kurtzarbeit labour market that reduces hours before headcount.
The Unconventional Economist will take a closer look at the two series tomorrow morning.
In June 2012 an estimated 1.169 million Australians were unemployed, an increase of 172,000 in a month, and the Australian workforce* was 12,009,000, (down 204,000 in a month) — comprising 7,351,000 full-time workers (down 289,000 since June 2011); 3,489,000 part-time workers (down 91,000 since June 2011) and 1,169,000 looking for work (up a large 324,000 since June 2011) according to Roy Morgan.
The increase in the headline unemployment estimate to 9.7% (up 1.5% in a month) is driven by several inter-related points: an increase in the number of Australians looking for work (up 172,000 in a month) and a much larger reduction in the number of employed Australians (down 376,000 in a month to 10.84 million) and a net reduction in the workforce (down 204,000) — as many Australians simply stop looking for work.
A further 931,000 Australians are underemployed – working part-time and looking for more work. This is 176,000 fewer than a month ago, and represents 7.8% of the workforce* — down 1.2% in a month. The reduction in underemployment accompanying an increase in unemployment is driven by movements in the part–time workforce. Specifically in June the number of Australians in part–time employment dropped 370,000 in a month — this represents the vast majority of job losses over the last month. When part-time workers lose their jobs, they are no longer looking for ‘extra’ work they are looking for work or give up — either way the number of underemployed falls even as unemployment rises.
In total 2.1 million Australians were unemployed or underemployed in June. This is 4,000 less than last month, 17.5% (up 0.3%) of the workforce.
The latest Roy Morgan unemployment estimate of 9.7% is now 4.6% above the 5.1% currently quoted by the ABS for May 2012.
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
