Yesterday, the June quarter National Accounts came out showing a real GDP growth spurt. As I noted yesterday, the results should be treated with caution because they apply to the period April to June, the strong growth was largely driven by inventory accumulation, and the household consumption behaviour runs counter to more recent retail sales data. Moreover, national accounting data is typically revised when the next quarter results are known. The other cause for caution in thinking that the Australian economy is really growing above trend is that more recent data is not good at all and it is difficult rationalising the poor data results with the vision of a booming Australian economy. Today, there was more bad news when the Australian Bureau of Statistics (ABS) published the Labour Force data for August 2011. It shows that the labour market has gone backwards for the second consecutive month with total employment declining and full-time employment falling again. It shows unemployment rising further and the unemployment rate at 5.3 per cent. More worrying is that the BS broad labour underutilisation rate (underemployment plus unemployment) rose to 12.3 per cent over the last quarter. This is not an economy that is “bursting at the seams”. The labour market is in reverse gear and accelerating.

With the US politicians are mired in a self-aggrandising dispute about who is best to manage a policy of fiscal austerity. Meanwhile, Rome burns around them. I know Americans like to talk about how free their nation is but while their elected representatives grossly indulge themselves in anti-intellectual disputes largely to console the demands of their corporate slave masters a growing number of US workers are being denied the freedom to earn a basic living. The latest data shows that the labour market has deteriorated again and the economic recovery is being undermined by those same elected representative. The US labour market is now looking very grim.