The ABS has just released its unemployment estimate for January, which registered a large seasonally adjusted lift to 6.4% from 6.1% in December:
The more reliable trend estimate was flat, however, at 6.3%, although it was revised up from 6.2%.
Total employment decreased in seasonal adjusted terms by 12,200 to 11,668,700, with full-time employment decreasing 28,100 to 8,078,000, partly offset by a 15,900 increase in part-time employment to 3,590,700.
The participation rate remained steady at 64.8%. And, on a more positive note, aggregate monthly hours worked increased 8.2 million hours (0.5%) to 1 ,607.6 million hours.
The headline result disappointed analysts, who had expected the economy to add 7,500 jobs in the month, with unemployment forecast to rise to only 6.2%.
I’ll be back shortly with my usual detailed report.
Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.
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Yuk! There goes the neighbourhood…
and the Abbott govt.
Joe Hockey just spat coffee all over his Italian suit
Hockey: “Jeez, how do I explain this one? I KNOW! I’ll tell them its Labor’s fault!. I am so smart! I am so smart! S.M.R.T…..I mean……S.M.A.R.T.”
@1petermartin: It’s true @justinbarbour. When unemployment was last this high (in 2002) Abbott was the employment minister. He knows what 6.4% feels like.
http://twitter.com/1petermartin/status/565683609055817728
If it keeps going like this Joe and Tony will need a new ‘stop the planes’ policy, on outward bound routes…
@AB,
How 6.4% UR feels can vary considerably depending on which direction the trend is in.
Love to see how Hockey spins this. He’ll probably just lie.
Food for thought: Last time job market was this bad, RBA had an additional 2.5% of cuts up their sleeve.
@ Stat
At some point it is not the % rate that matters so much any more, it is the # volume of actual unemployed.
Bigger population, same % rate, bigger problem. But you know this.
@Nick,
Extrapolate the current trend (i,e, unemployed persons increases around 65 – 70k per year), and one million unemployed is just over three years away, plus or minus some numberwang. That’s a number that’s hard to hide in a percentage.
But it’s all Labor’s fault, this “holocaust of jobs”.
Quick man, give her some more confidence! She needs more confidence!
How long before Mad Adam calls for the banning of employment data reporting? It’s all wrong, and it hurts confidence.
lol!!
I expected Dead Duck to blame Labor, but I didn’t expect him to invoke one of the darkest episodes in modern history to describe it. Not surprised though.
http://www.news.com.au/national/tony-abbott-attacks-former-labor-government-for-a-holocaust-of-jobs/story-fncynjr2-1227217424098
This bloke is terminal.
Lucky his high approval rating will mean everyone will easily accept his apology and think no more about it. If you were a bloke in a precarious position, this is one of those straws that can break a back.
Yes the Trend UR was flat over the month, but it was also revised up.
Obviously one of the data points that led to the RBA cutting IR.
Yes and because slashing rates will certainly help /sarc
But I have a great idea that will save the day! Negative interest rates.
In my new scheme that I have spent more time contemplating than Joe ‘the slug’ Hockey (1 minute) thought about anything he has ever said.
Negative interest means … that if you have borrowed say 1 million dollars at the SNB negative rate then you get a $75,000 dollar dividend each year.
Good for business even better for re-elcetion
ABS is becoming a joke. Or the companies are hiring and firing people every month. I.e. one month they hire and the next month they fire!
Trend is a better indicator to follow. Sadly it is pointing up
:-(
The Original Figures are possibly the better figures to use in particular for the state.
I believe the funding cuts over the last few years led to the ABS reducing the sample size of its survey, which has made the monthly figure more volatile.
So yes, follow the trend which, unfortunately, is creeping upwards.
Which makes the news take longer to get out, although it gets out in the end.
Cut the sample and sample only in the bogan, welfare suburbs e.g. Werribee, Broady, Noble Park etc. Rate cut ammunition aplenty.
Crikey, if they do the survey in Broadmeadows we’ll look like Spain or Greece.
http://www.heraldsun.com.au/leader/north/broadmeadows-unemployment-soars-to-new-high/story-fnglenug-1227108545065?nk=53af665fad748feb9a0f8ede9f0d868c
That’s way past rate cut territory.
We’re all over their strategies like a rash here.
Will house prices follow unemployment back to 2001 levels???
Probably, but with some sort of lag (months, years, decades)
We can only hope, ff.
nah we’re different
I wouldn’t count on any housing price correction until we correct our supply policies especially not for Sydney. Look at the Sydney housing construction data in the naughties you’ll see it dived because land developers just decided to sit on their undeveloped land…which turned out to be a genus decision …for them!
Now flush with cash from recent full-price developments their not likely to want to dump their un-developed land at a discount at ANY time in the near future …this takes us straight back to a dead-lock situation where would be house builders cant afford the base land and consumers cant afford the developed properties but land developers can afford to just sit and wait.
What we need is a ballesy NSW govt to release serious amounts of pre approved residential land and unmercifully crush land speculators ….Ask yourself..is that going to happen? not in the short term (budget reasons) and not in the long term (even more serious budget reasons) never mind the vested political interests.
A very hefty LVT targetted at land bankers needs to be implemented. If construction hasn’t commenced with 24 months and/or isn’t running to a reasonable schedule of completion then tax the sh!t out of the developer. Fair and reasonable.
@Andy!
Don’t the Chinese have a kind of ‘use it or lose it’ policy – if there’s not sufficient progress after 12 months, they confiscate the land? Maybe that could work.
Sounds good stat!!
Careful ff you’ll get me excited
AUD lost 70 pips. Nice little earner there.
I’ll second that.
Third….
YAY HOUSING IS GOING TO CRASH
THANK GOD
AND ALL THOSE GREEDY MORTGAGE HOLDERS WILL BE OUT ON THEIR EARS
Reversion != Crash
It does for the victims of cheerleading who buy at the peak… I mean at the permanently high plateau.
Choice aside, that’s the risk one takes by buying, or not. Accountability for actions rests with the individual. Do you actually believe that house prices should never fall below what one pays, and if that were to happen then that person becomes a victim (of the market)?
Deary me tmarsh, are you suggesting that we have some sympathy for specufestors?
I do feel bad for those bought recently, have very large leverage, live in their properties and have trouble keeping their incomes steady.
I don’t give a faaaaark about investors.
@ tmarsh
So will my daughter & her family, and many others who’s only “crime” was to want a home to grow their children in.
As long as she didn’t over borrow and doesn’t need to sell for more than she bought there is no problem. Paper value stuff.
“So will my daughter & her family, and many others who’s only “crime” was to want a home to grow their children in.”
Yeah, it’s a pretty basic and understandable desire. It’s a shame we’ve turned a basic need into such a ridiculous circus.
No tmarsh it works the other way.
Poor economic data means that interest rates MUST come down.
Therefore, financial assets will increase in value.
Those silly unemployed were probably renting anyway.
Now is looking like a better time than ever to invest in real estate given that rates are set to look favourable for a long time.
@melbourneguy “rates are set to look favourable for a long time”
With the LNP now running a $56billion black hole budget and likely to get worse, US interest rates rising and A$ falling it doesn’t take much of a leap to see a spike in rates sooner rather than later.
With WA, ACT and SA property already starting to decline on lower income and outlook, Syd and Mel will likely follow – my tip is the waters will breach in 2017
I’m with you on 2017. Previous mining boom/busts and their relationship to house prices point to that.
Thank God they lowered interest rates – immediately raised confidence, reduced unemployment, increased consumption and growth and because we were ASSURED there was macro-prudential no surge in SYdney prices.
Awesome work.
lol and GS is going to be knighted
Do not even look at the seasonally adjusted estimates. The confidence intervals are huge! The trend estimate was unchanged. That’s all we can really ready from this.
Actually the trend estimate has risen 0.1% comparing today’s release with the release published in January. They just changed the goal posts a little.
Also, if we look at how things went over twelve months we can cut out some of the noise, viz –
from the trend estimate there are an additional 65,000 unemployed people, or an increase of just over 5000 per month.
Abbott and Hockey, Joint Ministers for Unemployment.
Six months and they’ll be gone. No cabinet solidarity next time. The risks to the seats of the creme de la creme of the party will be too high.
Backbenchers now realise that for professional politicians in safe seats (normally Ministers and parliamentary secretaries and committee chairs) backbenchers are largely dispensable fodder to feed ideology every second or thrid election, but there is not much they can do about it.
Abbott’s only hope is 2 smooth years pleasing middle Australia rather than the 1%. Rising unemployment won’t do the trick.
Watch this next budget, it either reverts to middle class expectations (economic and social) and abandons anything deemed offensive or
1.Abbott and Hockey are for the chop, or
2. all his marginal seat holders are for the chop, or
3. both 1 and 2 above.
Just a reminder – on the eve of the glorious revolution, September ’13, UE was 5.7% (trend) and there were 706k unemployed.
The trend change doesn’t seem to have been all that volatile, it just ticks up 0.1% every second or third month, and looks set to keep ticking up for some time to come.
Do the 76k new unemployed (and their partners) live in marginal electorates?
Reading the unempleyment print, Gerard Minack’s words are ringing in my ears … “The main reason I do not yet have recession as a base case is that leading indicators of employment appear reasonable. If the employment leading indicators turn lower, then the risk of recession would commensurately increase.”
The preferred measure of unemployment, the trend rate, did not change. How is that a “surge”?
Increasing house prices are “flatlining” and unchanged trend UE is “surging”, Acme. You have to embrace the hyperbolic crashnik narrative.
This has all the hallmarks now of a serious property crash beginning within weeks. If people can’t find work, how the hell are they meant to service their loans? Widespread unemployment across society means widespread defaults on mortgages. Glad my money’s in the bank. All those fools who bought houses over the last few years are about to suffer massive negative equity. I’m ready to grab a bargain.
They’ll capitalise interest from their “equity mate”, banks will be swarmed with hardship provisions limiting cashflow, dividends will be slashed…
In terms of price, a fair value is around 40-50% discount to current prices (SE Melbourne) and a bargain would be anywhere below that.
I think we’ll see prices fall harder than that in some areas. My base case is a 60% fall in Melbourne property on average. Tony Abbott is the best possible PM one could hope for if needing cheaper property. Nobody can destroy a nation’s economy like Abbott and Hockey. They are a gift to us!
“Glad my money’s in the bank.”
Do you mean the bank that is going to take your money to recapitalise itself? 🙂
Luckily based on current Govt policy we are forecasting to bring in another 500,000 people each year over the next 3 years – with a net inward migration of 250,000
http://www.immi.gov.au/media/publications/statistics/immigration-update/nom-sep-2014.pdf
Funny how of the 300,000 temporary visas issued only 100,000 return home (ie working holiday visas)
At what point will the Govt conclude that with weak employment growth and strong economic headwinds its time to “stop the planes”?
There is a growing army of very resentful and angry unemployed / underemployed Australians.
Time to put aside the political correctness and have a real debate on this issue.
“Time to put aside the political correctness and have a real debate on this issue.”
How does political correctness come into this? There is nothing wrong with debating government policy and business activities (especially parasitic activities) as long as we don’t unnecessarily demonize overseas workers (who are just looking to eke out a living).
Well said.
I agree RobW – trouble is whenever anyone raises the question about immigration levels they get branded a racist.
That is unless it’s prefaced with a “stop the boats” slogan.
+1 stomper.
Very difficult to get a sensible discussion going on migration levels, as someone invariably pulls the ‘race card’ to shut down discussion. Unfortunately I believe this is because quite a few actual racists try to cloak their racist intent behind discussions on sustainable population levels. The whole illegal immigrant thing has been a fantastic distraction that allowed Howard, and every govt since, to crank the rate right up.
But I still think it’s an issue worth pursuing given the effect rapid population growth, in the absence of commensurate infrastructure spending, is having on quality of life.
I agree RobW – trouble is whenever anyone raises the question about immigration levels they get branded a racist.
That’s because 99% of the time when someone raises a “question” about immigration levels, they’re fearmongering about scary, brown. muslim, boat people.
Yeah, bloody soap-dodging hipsters in their stupid wicked vans.
That’s the real problem.
Consumer debt levels in Australia are approaching 2 trillion dollars (mostly mortgage debt). If for arguments sake you divide that by the approx 8 million with full-time jobs you get a result of $250k per person.
With unemployment trending up, our debt fuelled ponzi-like model of economic growth must surely be near endgame.
Brrrr… better get back to work and stop jitting around on MacroBusiness….
Do employers rate MacroBusiness higher or lower than Facebook for time wasting?
They’ll have MB as their company intranet page in 5 years time. At least the FIRE ones will!
Lindsay David:
@linzcom: 2015 Australia looks like its going to create more new houses than jobs
https://twitter.com/linzcom/status/565698293943271424
15,200 new jobs in twelve months sets the bar pretty low.
That’s strange this chart says there were 185,000 new jobs created in the last 12mnths.
http://www.macrobusiness.com.au/wp-content/uploads/2015/02/ScreenHunter_6025-Feb.-12-12.31.jpg
You got me! Read the wrong column above.
NZ’s unemployment rate jumped from 5.4% from Nov to 5.7% in Feb…
Popping up housing price so as to increase the construction work and knock down unemployment rate is just short- lived…Wealth effect theory is working on the condition that the housing is undervalue… Considering house price is much lower in NZ than OZ before their easing money policy, OZ now is in a very dangerous shape…
RBA should learn the lesson…
Back to 2007 GFC, can FRB save the housing market? US house price was around 300K or 4.6 times of household income before it crashed…personally I believe FRB can defer the housing bubble burst…however they choose to let it go and come back with a healthy and strong economy…and they do. And it takes 6 years…
Australia…is different..for the bubble to burst, the earlier, the better