Australian labour market – slight improvement after two bad months

For the last two months, the Australian labour market has gone backwards. The deterioration seems to have stabilised in October. The Australian Bureau of Statistics (ABS) released the latest labour force data today (November 13, 2025) – Labour Force, Australia – for October 2025, which reveals a slight drop in official unemployment and underemployment and a stable employment to population ratio – marking time. The best sign this month is that full-time employment growth was relatively strong. However, there are now 10 per cent of available labour not being used in one form or another, so it is ludicrous to talk about Australia being close to full employment. There is substantial scope for more job creation given the slack that is present.

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Kyoto Report 2025 – 7

This Tuesday report will provide some insights into life for a westerner (me) who is working for an extended period at Kyoto University in Japan but who over the years of working here has increasingly began to understand the language and local cultural traditions.

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IMF comes late to the party but then cannot quite admit it

In an early blog post – Inflation targeting spells bad fiscal policy (October 15, 2009) – I outlined prior research that I had done on the issue of inflation targetting (IT). In my 2008 book with Joan Muysken – Full Employment abandoned – we provided further analysis on the issue. We found that there was no significant difference in inflation and output dynamics between IT and non-IT nations. This was consistent with the evidence from other studies. Mainstream economists continually claim that IT delivers a range of virtues and central banks that implement IT use interest rates hikes aggressively when there is a hint of price pressure emerging. The latest evidence from an IMF study is that there was no significant difference between IT and non-IT nations in the recent inflationary episode. The research exposes IT for what it is – an article of ideological faith rather than an evidence-based and responsible policy approach.

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Kyoto Report 2025 – 6

This Tuesday report will provide some insights into life for a westerner (me) who is working for an extended period at Kyoto University in Japan but who over the years of working here has increasingly began to understand the language and local cultural traditions.

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Supply-side employment services models fail and promote sociopaths

One of the ways in which neoliberal dogma altered the relationship between government and the citizens in Australia was in the way employment services were delivered. Before this dogma gained traction, the Australian government operated the – Commonwealth Employment Service (CES) – which was created in 1946 as part of the grand plan to sustain full employment and improve the material standards of living after the travails of the Great Depression and then World War 2. It was created by the – Re-establishment and Employment Act 1945 – which was “designed to help members of the forces transition back to civilian life by providing for their re-establishment in employment and civil life”. The CES was an integral aspect of this process and provided job matching services, occupational planning, vocational training and support, income support payments, and career guidance. It was a very effective service that operated over many decades after its introduction. There were spin-off services to help those with disabilities (particularly chronically injured service men and women). As neoliberalism took hold in Australia, the narrative shifted towards blaming the unemployed for their plight rather than understanding that the unemployment was due to a systemic lack of jobs being created because aggregate spending was insufficient. Parts of its operation were hived off to (grasping) private operators and eventually the whole operation was privatised in 1998. It has been downhill ever since and the problems arising from this decision by government continue to serve as a blight on the civility and decency of Australian society. The latest news, which I canvas in today’s post is just more of the same.

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Japan – errant fiscal rule is sure to backfire

The Prime Minister’s Office of Japan has now released the transcript of the – Policy Speech by Prime Minister TAKAICHI Sanae to the 219th Session of the Diet (October 24, 2025). This was her first major speech after taking on the office of Prime Minister and allows us to see some detail beyond the rather general statements she had made previously about being supportive of fiscal expansion. The detail does not build much confidence.

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Kyoto Report 2025 – 5

This Tuesday report will provide some insights into life for a westerner (me) who is working for an extended period at Kyoto University in Japan but who over the years of working here has increasingly began to understand the language and local cultural traditions.

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Japan challenges – is there really a labour shortage? – Part 6

This blog post continues my exploration of the available productive resources in Japan which would allow a nominal fiscal expansion to be accommodated without adding to the inflationary pressures. People consistently point to the low official unemployment rate as a proxy for a shortage of labour in Japan. It is good that the official unemployment is consistently low and that is a good thing. But the official rate might not be a very good indicator of the degree of labour market slack, especially as Japan has endured many years of low economic growth and falling real wages. A focus on underemployment probably provides a better guide to the availability of idle labour resources. That is what I consider in today’s instalment.

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Japan challenges – is there really a labour shortage? – Part 5

I do not have much time to write today as I am moving house later this afternoon and have a few work meetings to attend before that. So the next topic might take two shorter parts. As predicted, Ms Takaichi became the first female Prime Minister for Japan on Tuesday after consolidating a coalition with the unlikely 日本維新の会 (Japan Innovation Party or Ishin for short), who are based in Osaka and is a sort-of right wing group that opposes central government in Tokyo and is a mixture: free market narratives, anti-immigration, mixed with things like government-provided free education for all. It is an unlikely coalition that only a place like Japan could conjure up. But she is now PM and the ailing LDP elite rules on, although for how long is another matter. The new PM is, as I have indicated against using monetary policy as the main macroeconomic policy tool and favours further fiscal expansion under the new heading 責任ある積極財政 (Responsible and proactive fiscal policy), which was a term given to her by my research collaborator here at Kyoto University (Prof. Fujii), who will become one of her senior advisors in the new government. The question I am toying with as we prepare for this major symposium at the Diet on November 6, 2025, is what actual scope is there for fiscal expansion when we are told that there is a drastic labour shortage. That is what I am discussing in this part of the series today.

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Kyoto Report 2025 – 4

This Tuesday report will provide some insights into life for a westerner (me) who is working for an extended period at Kyoto University in Japan but who over the years of working here has increasingly began to understand the language and local cultural traditions.

Read more
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