Commentary and analysis of labour force data releases.

Europe – the deliberate wastage of its youth continues

Earlier this month (August 11, 2017), Eurostat published the latest European Union data for – Young people in the EU: education and employment. This data now allows us to track the fortunes of three age cohorts – 15-19, 20-24 and 25-29 years since before the crisis to the end of 2016. So a teenager prior to the crisis (2007) would be transiting into the 25-29 years cohort in 2016. One of the disturbing trends shown in the data is the increasing number of young people in the older ‘youth’ categories that in 2016 we classified as being Neither in Employment, nor in Education or Training (NEET). Some will have been in that category for the entire duration of the crisis – that is, they dropped out of school early, are not receiving any skills development and are unemployed. Whereas in 2007, the proportion of NEETs in the 25-29 years cohort was 17.2 per cent, that figure has risen to 18.8 per cent by 2016 (although the peak of 20.7 per cent was reached in 2012). This suggests that the systems which provide transitions between education and employment are not working effectively because the demand-side of the labour market is deficient. That is, there is a lack of jobs available overall and the most disadvantaged youth workers are at the back of the queue along with the disabled and other stigmatised cohorts (for example, Roma people in the European context). There is an urgent need for a true Youth Job Guarantee, to replace the faux Youth Guarantee that was introduced in 2012. But then that would require abandoning the obsession with austerity and dysfunctional fiscal rules. The European Commission’s answer to the problem will be to have another ‘summit’ or two and issue plenty of statements replete with motherhood statements.

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Australian labour market – stumbling along with no definitive trend

The latest labour force data released today by the Australian Bureau of Statistics – Labour Force data – for July 2017 shows that total employment rose only modestly (27,900) while full-time employment contracted. Part-time employment rose by 48,200 reversing the decline from last month. As a result of a rise in the participation rate (0.1 points), unemployment rose by 1,100, and the official unemployment rate decreased by less than 0.1 pts to 5.6 per cent. Underemployment rose to 14 per cent as monthly hours of work declined with the fall in full-time employment. The broad labour underutilisation remains high at 14 per cent with unemployment and underemployment summing to 1,812.6 thousand persons. The teenage labour market showed a slight improvement but remains in a poor state. Overall, my assessment of the Australian labour market is that it remains in an uncertain state. There is no definitive trend yet.

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US labour market – improves again in July

Shonk is an Australian/NZ slang word to describe someone engaged in shonky behaviour, which the Oxford Dictionary describes as being behaviour that is “Dishonest, unreliable, or illegal, especially in a devious way”. So a shonk means a “dishonest person; swindler or con artist” and while intent is implied it doesn’t have to be conscious action (note the inclusion of the descriptor “unreliable”). It could just mean stupidity or ignorance that leads to shonky performance. I will come back to that topic soon. On August 4, 2017, the US Bureau of Labor Statistics (BLS) released their latest labour market data – Employment Situation Summary – July 2017 – which showed that total non-farm employment from the payroll survey rose by a relatively healthy 209,000 in July. The weak result for May now seems to have been a blip in the data. The Labour Force Survey data showed that employment rose by 345 thousand in July but was still not large enough an increase to offset the rise in the labour force (349 thousand), and as a consequence, official unemployment rose by 4 thousand. The official unemployment rate was stable though at 4.4 per cent. There are still 6.98 million unemployed persons in the US. There is still a large jobs deficit remaining and other indicators suggest the labour market is still below where it was prior to the crisis. Further, the bias towards low-pay and below-average pay jobs continues.

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Australian government employment plan – racist and in breach of our laws

Today’s discussion is about how employment policy becomes so corrupted by neo-liberal ideology (overlaid with some healthy racism) that the government causes damage rather than advances well-being. The examples I outline demonstrate the wider problem that neo-liberal inspired governments clearly understand the economy is not working yet they cannot bring themselves to introduce obvious solutions to the problems identified. Further, while they claim their policy choices are constrained by the ‘money’ they have to spend (limited according to their narrative), when they do spend ‘money’ they bias the benefits to corporate interests as a profit subsidy rather than providing sustainable income support for the most disadvantaged who just become pawns in the subsidy to capital. And then, they pretend, they are obeying ‘market’ dictates when the ‘free market (not!)’ was never in the picture anyway. The on-going hypocrisy of this neo-liberal era.

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Australian labour market remains in an uncertain state

The latest labour force data released today by the Australian Bureau of Statistics – Labour Force data – for June 2017 shows that while total employment rose only modestly (14,000) the strong rebound in full-time employment from last month continued (up 62,000). Part-time employment fell sharply though (48,000). As a result of a rise in the participation rate (0.1 points), unemployment rose by 13,100, although the official unemployment rate was steady at 5.6 per cent after the ABS revised it upwards by 0.1 points from the May result. The broad labour underutilisation remains high at 13.9 per cent with unemployment and underemployment summing to 1,795 thousand persons. The teenage labour market also deteriorated further in June and remains in a poor state. Overall, my assessment of the Australian labour market is that it remains in an uncertain state. There is no definitive trend yet.

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US labour market – improves in June but still no growth trend is apparent

On July 7, 2017, the US Bureau of Labor Statistics (BLS) released their latest labour market data – Employment Situation Summary – June 2017 – which showed that total non-farm employment from the payroll survey rose by a relatively healthy 222,000 in June, after a much weaker result in May 2017. The Labour Force Survey data showed that employment rose by 245 thousand in June but was still not large enough an increase to offset the rise in the labour force, and as a consequence, official unemployment rose by 116 thousand. The official unemployment rate rose by 0.1 points to 4.4 per cent as a result. There are still 6.98 million unemployed persons in the US. The Federal Reserve Board’s Labour Market Conditions Index showed a slight deterioration in the overall labour market. There is still a large jobs deficit remaining and other indicators suggest the labour market is still below where it was prior to the crisis. Further, the bias towards low-pay and below-average pay jobs continues.

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Australian labour force data – improvement but no positive trend yet emerging

The latest labour force data released today by the Australian Bureau of Statistics – Labour Force data – for May 2017 shows that employment rose by 42,000 on the back of a strong rebound in full-time employment (up 52,100), given last month’s contraction in full-time work. Unemployment fell by 18,600, which allowed the official unemployment rate to fall to 5.5 per cent. There was a slight uptick in the participation rate as job opportunities improved. Underemployment remained steady at 8.6 per cent and broad labour underutilisation remains high at 14 per cent with unemployment and underemployment summing to 1,837.4 thousand persons. The teenage labour market also deteriorated in May contrary to the overall improvement. It remains in a poor state.

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US labour market – poor results – not close to full employment

On June 6, 2017, the US Bureau of Labor Statistics (BLS) released their latest labour market data – Employment Situation Summary – May 2017 – which showed that total non-farm employment from the payroll survey rose by just 138,000 in May. While the payroll data confirms an on-going deterioration in job creation, an examination of the Labour Force Survey data presents an even worse picture. The official unemployment rate fell from 4.4 per cent to 4.3 per cent, the lowest rate since May 2001. But the fall in unemployment of some 195 thousand persons was not a sign of strength. Total employment fell by 233 thousand but was a smaller decline than experienced by the labour force (down 429 thousand) on the back of a fall in the participation rate (0.2 percentage points). In other words, hidden unemployment rose while official unemployment fell as workers gave up looking for work in the face of declining employment growth. The estimate of employment change from the Labour Force Survey was also positive (156 thousand net jobs added). There is still a large jobs deficit remaining and other indicators suggest the labour market is still below where it was prior to the crisis. Which makes the claims by a number of analysts that the US jobs market is so strong that inflation is about to accelerate on the back of wages growth (which at present is largely non-existent). In other words, there are many assessments that the unemployment rate has reached the so-called NAIRU (Non-Accelerating Inflation Rate of Unemployment) below which accelerating inflation becomes inevitable. I doubt that assessment.

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Australian labour market data – mixed signals with underemployment rising

The latest labour force data released today by the Australian Bureau of Statistics – Labour Force data – for April 2017 shows that while employment rose by 37.4 thousand, full-time employment fell by 11,600 and monthly hours worked fell by 0.12 per cent. Underemployment rose by 0.1 points. The employment growth did outstrip the underlying growth in the population and with the participation rate steady, unemployment fell by 19,100. The unemployment rate fell by 0.2 points. Certainly the employment growth was modest compared to last month. Broad labour underutilisation remains high at 14.3 per cent with unemployment and underemployment summing to 1,836.7 thousand persons. The teenage labour market also showed some improvement although full-time employment fell. It remains in a poor state.

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Australian labour market – stronger performance this month (but suspicions remain)

The latest labour force data released today by the Australian Bureau of Statistics – Labour Force data – for March 2017 shows a rather substantial jump in full-time employment (74,500 thousand) and a rising participation rate (up 0.2 points). That is usually a virtuous duet even though unemployment rose by 4 thousand and the unemployment rate was steady at 5.9 per cent. I say virtuous because it means that more jobs are being created and more people are coming back into the labour market to access the better environment. The curious thing though is tha total monthly hours of work barely rose, which leads one to suspect that the employment strength is a sampling issue and we will see next month whether the underlying behaviour over the last several months reasserts itself or whether March 2017 marks a shift to better times. Put me in the sceptical camp at this stage. Broad labour underutilisation remains high at 14.7 per cent with unemployment and underemployment summming to 1,890.3 thousand persons. The teenage labour market also showed some improvement but remains in a poor state. Overall, we will have to see.

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