Commentary and analysis of labour force data releases.

US Labour Market still adding jobs but scope for further expansion

Last week’s (July 5, 2019) release by the US Bureau of Labor Statistics (BLS) of their latest labour market data – Employment Situation Summary – June 2019 – reveals a steady labour market with month-to-month volatility. The US labour market is still adding jobs, albeit at a slower pace than last year. The unemployment rate remains low (at 3.67 per cent) and the participation rate has moved up a tick, which is a good sign. It is also clear that there is still a substantial jobs deficit remaining and considerable scope for increased participation.

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Australian labour market improves slightly but remains in a fairly weak state

The Australian Bureau of Statistics released the latest data today – Labour Force, Australia, May 2019 – which reveals a slightly improved labour market although full-time employment growth was weak and total hours worked declined. Underemployment rose slightly (0.1 points) to 8.6 per cent further accentuating the fairly weak overall situation. The total labour underutilisation rate (unemployment plus underemployment) remained steady at 13.7 per cent and the persistence of that level of wastage makes a mockery of claims by commentators that Australia is close to full employment. The other disturbing outcome was that full-time and total teenage employment also fell. My overall assessment is the current situation can best be characterised as remaining in a fairly weak state. Most of the dynamics over the last few months have been due to swings up and down in part-time employment.

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We are all entrepreneurs now marching towards a precarious and impoverished future

Some years ago, I was a panel speaker at an event in Sydney covering the topic of wage developments. I shared the podium with a young woman who was something like NSW Youth of the Year. It was at a time that employer groups were lobbying the conservative government to abandon penalty rates for workers in low-wage industries (hospitality, tourism, etc) and strip powers from trade unions. I spoke about how that agenda was designed to advance their class interests and fitted squarely with the neoliberal intent to redistribute real income away from workers towards profits. The young woman followed and announced that class was dead and that there was no such thing as a worker anymore – she said “we are all entrepreneurs now!”. Prior to that, as our national government was privatising our public companies such as Qantas and Telstra, our prime minister announced “we are all capitalists now” referring to the idiocy of people buying shares in the companies that we collectively ‘owned’ anyway while they were in public hands. The more recent manifestation of this delusion that class is dead and we are all entrepreneurs is the so-called ‘gig economy’. It seems that we now have millions of people (first young but increasingly older) who think that entrepreneurship is about buying a cheap scooter and tearing around streets delivering pizzas in all weather to earn a few dollars while the companies that ’employ’ them (or rather contract them) walk away with millions. These workers, sorry, entrepreneurs, face a bleak future. When there are no pizzas being ordered they have no shifts. When they are sick they have no pay. When they go on holidays they have no pay. And when they get old they will have no superannuation. Sounds like a plan to make someone rich.

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Australian labour market – weakness prevails

The Australian Bureau of Statistics released the latest data today – Labour Force, Australia, April 2019 – which reveals a weaker labour market with negative full-time employment growth. With rising unemployment and underemployment, the total labour underutilisation rate (unemployment plus underemployment) increased by 0.4 points to 13.7 per cent. That is a deplorable situation. There were a total of 1,855.1 thousand workers either unemployed or underemployed. The other disturbing outcome was that full-time teenage employment also fell. My overall assessment is the current situation can best be characterised as in a weak state. The Australian labour market remains a considerable distance from full employment. There is clear room for some serious policy expansion at present. In the current federal election campaign there is only talk of bigger fiscal surpluses.

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Australian labour market stronger month but the underutilisation rate rises

The Australian Bureau of Statistics released the latest data today – Labour Force, Australia, March 2019 – which reveals a stronger labour market with notable growth in full-time employment. The unemployment rate rose by 0.1 points to 5.0 per cent, but, only because the participation rate rose by 0.1 points. However, there is still underlying weakness in the labour market with underemployment rising by 0.1 points to 8.2 per cent and the total labour underutilisation rate (unemployment plus underemployment) rising by 0.2 points to 13.2 per cent. There were a total of 1,782.8 thousand workers either unemployed or underemployed. The other disturbing outcome was that, despite the stronger overall employment growth, the teenage labour market deteriorated further (particularly full-time work). My overall assessment is the current situation can best be characterised as in a moderate state. The Australian labour market remains a considerable distance from full employment. There is clear room for some serious policy expansion at present. In the current federal election campaign there is only talk of bigger fiscal surpluses.

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US labour market steadies in March 2019

Last week’s (April 5, 2019) release by the US Bureau of Labor Statistics (BLS) of their latest labour market data – Employment Situation Summary – March 2019 – is still being affected by the variability in the sampling and benchmarking changes made by the BLS. However, working through those impacts, one concludes that the US labour market is still adding jobs, albeit at a slower pace than last year. The unemployment rate remains low (at 3.81 per cent) and the participation rate has come off a bit, indicating a slowdown in underway, although month-to-month variability should not be taken as a trend. It is also clear that there is still a substantial jobs deficit remaining and considerable scope for increased participation.

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Australian labour market – weakness continues, January was a blip

The Australian Bureau of Statistics released the latest data today – Labour Force, Australia, January 2019 – which reveals a weak labour market and continues the trend established in 2018 and is consistent with the very weak National Accounts data that was released earlier this month. It now looks like the stronger January result was a blip. The weak employment growth was accompanied by a decline in the labour force, and, as a result, unemployment fell by 11,700 thousand. Adjusting for the weaker participation suggests that the unemployment rate would be 5.2 per cent rather than 4.9 per cent. Last month, I concluded that the range of indicators available to us suggest that there would be a further slowdown in February and March. That is what was revealed by today’s data. My overall assessment is the current situation can best be characterised as weak. The Australian labour market remains a considerable distance from full employment. There is clear room for some serious policy expansion at present. There is clear room for some serious policy expansion at present. Where is the Labor Party on this? Chasing fiscal surpluses! Go figure.

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US labour market weaker than it was at the end of 2018

Last week’s (March 8, 2019) release by the US Bureau of Labor Statistics (BLS) of their latest labour market data – Employment Situation Summary – February 2019 – is a little hard to believe and shows the sampling variability involved in survey work. In January, the BLS estimates that total non-farm payroll employment rose by 311,000 (revised up from 304,000). This month the estimate was only 20,000. So either the US economy is crashing (given employment is a lagging indicator) or some one-off factors (bad weather, shutdown, you name it) were present or the results are too variable to be believed. The most likely explanation is that employment growth is fading and the strength in the US labour market coming into 2019 is gone. Taking the Household Survey results, we saw employment rise by 255 thousand and the official unemployment rate fell by 0.2 points to 3.8 per cent on the back of a steady participation rate. Even with all this volatility in the estimates, the best guess is that the US labour market has probably weakened somewhat from where it was at the end of 2018. It is also clear that there is still a substantial jobs deficit remaining and considerable scope for increased participation.

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Australian labour market – slight improvement but still no clear direction

Today, the Australian Bureau of Statistics released the latest data – Labour Force, Australia, January 2019 – which reveals relatively strong full-time employment growth which reverses the last two months of contracting full-time employment contraction. The strong employment growth was unable to keep up with the growth in the labour force, and, as a result, unemployment rose a little (6.6 thousand). The strong full-time result saw the broad measure of labour underutilisation fall by 0.1 points to 13.2 per cent but still remains at elevated levels. The teenage labour market continued to deteriorate. The current situation can best be characterised as slightly improved but with no clear direction in sight. Other indicators are suggesting a slowdown in the next few months. What we can conclude is that the Australian labour market remains a considerable distance from full employment. There is clear room for some serious policy expansion at present.

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US labour market continues to improve but ‘middle class’ jobs disappearing

Last week’s (February 1, 2019) release by the US Bureau of Labor Statistics (BLS) of their latest labour market data – Employment Situation Summary – January 2019 – showed that total non-farm payroll employment rose by 304,000 and the unemployment rate rose by 0.1 points to 4 per cent on the back of a 0.1 points rise in the participation rate. The labour force survey estimates were significantly impacted by changes in population benchmarks (an annual occurrence). However, all indications are that the labour market continues to improve. We will see in the next few months whether the strong January payroll employment growth was a one-off blip or a sustained trend. While the US labour market is looking fairly robust there is still a substantial jobs deficit remaining which tells us that it remains some distance from full employment. And, my latest analysis on which occupations are enjoying the employment growth shows that there has been a distinct hollowing out of median pay jobs (the so-called ‘middle class’ jobs), which helps to explain the sharp increases in income inequality.

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