Roy Morgan unemployment jumps to 10.9%

By Leith van Onselen

The latest Roy Morgan Research (RMR) unemployment estimate for March jumped 1.3% to 10.6%, and surged 2.0% over the year:

Labour underutilisation also surged to 20.6%.

Below are the key points from the release:

  • Australian unemployment increased to 1.49 million in March (10.9% of the workforce) with an additional 1.32 million now under-employed as overall employment is down on a year ago.
  • The workforce, which comprises employed Australians and those who are unemployed and looking for work, increased by 65,000 to 13,649,000 on a year ago. However, despite the increasing workforce, now 216,000 fewer Australians were employed in March than a year ago, down to 12,158,000.
  • The fall in employment was driven by a significant decrease in part-time employment of 203,000 to 4,228,000. Over the past year full-time employment was virtually unchanged down by 13,000 to 7,930,000.
  • The lack of jobs and increasing workforce drove a significant increase in unemployment. Now 1,491,000 Australians (10.9% of the workforce) were unemployed, up 281,000 on a year ago and the unemployment rate is up by 2%.
  • An additional 1,321,000 Australians (9.7% of the workforce) were under-employed, working part-time and looking for more work, a decrease of 41,000 in a year (down 0.3%).
  • In total a record high 2,812,000 Australians (20.6% of the workforce) were either unemployed or under-employed in March, an increase of 240,000 in a year (up 1.7%).

As explained each month, RMR measures employment differently from the ABS:

According to the ABS definition, a person who has worked for one hour or more for payment or someone who has worked without pay in a family business, is considered employed regardless of whether they consider themselves employed or not.

The ABS definition also details that if a respondent is not actively looking for work (ie: applying for work, answering job advertisements, being registered with Centre-link or tendering for work), they are not considered to be unemployed.

The Roy Morgan survey, in contrast, defines any respondent who is not employed full or part-time and who is looking for paid employment as being unemployed…

Since Roy Morgan uses a broader definition of unemployment than the ABS, it necessarily reports a higher unemployment figure. In addition, Roy Morgan’s measure tends to be far more volatile, owing to the fact that it draws on a smaller sample than the ABS and is not seasonally adjusted.

The difference between the ABS unemployment rate (5.4% NSA as at February) and the unofficial RMR measure is now 5.5%:

Back in February, Roy Morgan CEO Michelle Levine noted that jobs creation has been offset by high immigration:

Prime Minister Scott Morrison earlier this week pledged that a re-elected L-NP Government would create over 1.25 million jobs over the next five years. This sounds great however one needs to consider that in the context of high population growth driven by high immigration over the last five years since February 2014 the L-NP Government has created nearly 1.3 million jobs and unemployment and under-employment has barely changed.

“…whichever Government is elected at this year’s Federal election needs to find a way to provide new jobs both for new immigrants to Australia as well as the over 2 million long-term unemployed and under-employed consistently revealed by Roy Morgan’s employment estimates.”

Today, Levine has sung a similar tune:

Alongside a decline in total employment there were also new entrants to the workforce who have been unable to find jobs which led to a significant increase in unemployment. Unemployment increased by 281,000 to 1,491,000 (10.9% of the workforce) and is now at its highest raw number since just over five years ago in February 2014 (1,561,000 or 12.3%).

Australia’s rat-wheel economy in action.

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Comments

  1. “According to the ABS definition, a person who has worked for one hour or more for payment ”

    That, should be a scandal. That completely undermines the ABS’s entire analysis. I don’t understand how they are getting away with it.

    • Fabian AlderseyMEMBER

      That’s the international standard, to be able to compare Australia’s unemployment rate to the unemployment rates in other countries.
      The ABS also publishes a range of measures in addition to the headline unemployment rate.

  2. kiwikarynMEMBER

    Wait until they throw a few bank tellers, mortgage brokers, and real estate agents onto that scrapheap.

  3. It happened in Argentina when they kept under-reporting unemployment and inflation. The RBA keeps fiddling their inflation measures by adjusting basket weights and excluding big-ticket items like housing. Most independent measures of inflation are higher than the RBA.

    Australia is in trouble if the government agencies like the Treasury, RBA and ABS doctor their statistics to give results the government wants to hear.

    • Fabian AlderseyMEMBER

      Do you mean the RBA or the ABS?
      The ABS adjusts basket weights to stay relevant in terms of current consumer expenditure – should the weight of telecommunications have been fixed in the 1950s and never been updated to reflect mobile telephony, the internet and so on?
      Housing is included in the CPI, in terms of rents and the cost of building a house. The land component (which is the part which has been inflating immensely) isn’t viewed as a consumption item, so it is excluded from the CPI. The ABS also publishes the Residential Property Price Indexes, which include the price of the land. The RBA looks at a range of inflation measures (not just the CPI), so it’s up to them in terms of looking at the range of inflation measures available to them (including the RPPI) when making their decisions.
      There are no doctored statistics, just slanted commentary when people (e.g. politicians) pick and choose the bits they talk about.

      • You sound knowledgeable about the ABS statistics processes. What happened then around 2010 other than the GFC (GFC should not make any differences to stats accuracy) to create a shift between RM and ABS unemployment and underemployment data? Any idea. From anecdotal experience I would say the RM data is on the money and the ABS data has been filtered and massaged down to fit a political requirement but not matching the “real world” actual economic position. Any changes in how the ABS data was calculated around 2010 ish?

      • Fabian AlderseyMEMBER

        Hmm, seems my previous comment hit the spam filter?
        Anyway, I’ve checked the ABS website and couldn’t see anything in terms of major methodological changes…the October 2010 issue mentions some re-estimation of the population estimates, but that dropped both the total number of people and the total number of unemployed people, so wouldn’t have had a major impact in terms of the overall unemployment rate.
        Major changes which would change the definition of employment/ unemployment would be telegraphed loud and clear, and I can’t imagine the ABS would make such a change without revising the entire series to the new basis. You want to be able to meaningfully compare the unemployment rate across the years/ decades.

      • @kent my theory is the advent of the gig economy. The abs captures them as employed, rm as not.

      • I’m not sure whether you’re defending the ABS/RBA here or not but the CPI basket is not representative of true inflation, ignoring for a second the fact that a ‘general price level’ does not exist anyway.

        For starters, the cost of energy/ utilities is ignored but represented to a small extent by ‘transport’. If ‘public’ transport then this is a useless number as it is normally subsidised (being politically sensitive as it is). Housing has a 23% weighting in the basket despite people in the real world tipping in 30-40% of post-tax income into paying mortgages and rent. Food and non-alcoholic beverages represents a lowly 16% weighting (completely unrealistic for families on modest/low incomes, unless they’re eating baked beans on toast every night). In addition, the food groups include supermarket loss-leading items like milk, bread and other basics whose prices remain suppressed through one or other mechanism. And non-alcoholic bevs include lolly water which is ferociously competitive and always dirt cheap or on sale.

        The point I’m trying to make is that if you cherry-pick the items in your basket, assign weights that sway the narrative you’re pursuing then you can fairly easily create a benign picture for inflation. The only way that CPI is going to move materially is when the market loses complete faith in the AUD — then you’ll see everything rise sharply in unison.

      • Fabian AlderseyMEMBER

        Dominic, your comment confuses me on many levels.
        The cost of energy/utilities is part of the CPI – in the Housing group there’s the Utilities subgroup, which contains the expenditure classes Electricity, Gas and Other Household Fuels, and Water and Sewerage.
        Transport is both private and public transport – consumers make use of both, so they’re both in there.
        The weighting pattern is for the average Australian consumer in each capital city. Every individual person’s personal weighting pattern will differ from this average. The ABS publishes some cost of living measures (the Analytical Living Cost Indexes) which cover some population sub groups (such as unemployed people, or self-funded retirees), but currently there is no mechanism for people to enter their personal weighting pattern into the website and calculate their own inflation (which, even if they did that, wouldn’t be accurate, since the products they buy within each expenditure class may differ from the average mix of products within that expenditure class).
        Lastly, yes, of course the CPI includes Supermarket loss leaders such as the cheap milk, because a massive quantity of it gets sold – it represents part of the inflation picture for many, many consumers. The ABS doesn’t care why consumers are paying unnaturally low or high prices for a particular good or service – they just note that that’s the price consumers are paying. The milk prices are real, consumers are paying those prices. You can infer the prices are “fake news”, but they’re not.

  4. Jumping jack flash

    Thanks!

    This pretty much answers my question in the other thread about the comparison of the Howard measure of unemploment to the Keating.

    We hit a K10.9 compared to a H5.4.

    Thats assuming that the Morgan is measuring close to what the Keating was measuring back in the dark ages of the RWHTH, where we endured those government-busting 11% figures….

    11%… now that’s pretty close to 10.9 don’t you think?