Don’t say we didn’t warn you. From yesterday’s payrolls:
Did somebody lock down the economy again? No, the Depressionberg Unstimulus is busy gutting incomes for the vulnerable while boosting incomes for the rich with the end result being a giant demand hole that SME’s just crashed into. Add that they can now automate on the taxpayer’s dime so they are shredding headcount!
More from CBA’s excellent Gareth Aird:
Key Points:
ABS payroll jobs declined by 0.8% over the two weeks to 17 October following a 0.9% contraction in the prior two weeks.
We expect employment to fall by 50kin the October labour force survey, due 19 November.
The labour market data should improve over November and December.
According to the latest ABS data, total payroll jobs fell by 0.8% over the two weeks to 17 October. The 0.9% decline in payroll jobs over the previous fortnight means that over the four weeks to 17Octobertotal payrolls jobs have declined by a significant1.6%. Taken at face value this is both a bad and surprising result.
By state, the decline in payrolls was broad-based. There has been falls over the fortnight to 17 October in NSW (-1.3%), Vic (-0.4%), QLD (-0.6%), WA (-1.0%), SA (-0.3%), Tas (-0.9%), NT (-1.1%) and ACT (-0.6%). Indeed the fall in payrolls over the past four weeks has been significant in all states and has been particularly large in NSW (-2.2%). The contraction in payroll jobs in Victoria was expected given the various restrictions that have been in play until only very recently. But the decline in payroll jobs across the other states is surprising, particularly the magnitude of falls in the bigger states of NSW, QLD and WA.
It may be the case that the tapering of JobKeeper payments at the end of September has had a negative impact on the labour market. But our internal data that captures wages and salaries paid into CBA bank accounts does not support that hypothesis. In addition, while the number of CBA customers that are receiving the JobSeeker payment has inched a little higher in recent weeks, it has not risen by as much as the contraction in payrolls implies.
The payroll jobs by industry should add some colour, but again this is throwing up some unusual results. Over the past four weeks there have been big declines in payroll jobs in agriculture (-5.7%), construction (-4.7%), real estate (-2.7%) and professional services (-2.9%). It is not clear to us why jobs in some of these industries should have fallen so much over a short period.
Here we remind readers that ABS weekly payroll jobs are an experimental series presented in original terms. The data only dates back to January 2020 so we don’t have a historical time series to study potential seasonal patterns. The regular monthly labour force survey looks at the number of people employed which is different to the number of payroll jobs and we cannot simply extrapolate seasonal patterns between the series.
No mystery to me. JobSeeker rises with a lag. It’s the Depressionberg Unstimulus smashing into the labour market.
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.
