Yesterday, the third-quarter National Accounts data revealed that real GDP growth is trailing behind the underlying population growth which means that per capita incomes have been falling. Today’s release by the Australian Bureau of Statistics (ABS) of the Labour Force data for November 2012 reveals that employment growth is also failing to keep pace with the underlying population growth and the only reason unemployment is not skyrocketing is that more workers are dropping out of the labour force as a result of the lack of job opportunities being created. The data is unambiguously bad. The unemployment rate fell to 5.2 per cent but only because the participation rate fell. The fact that workers are giving up looking for jobs is a portent of a very sluggish labour market. So unemployment fell but hidden unemployment rose. The trend performance of the labour market is flat and these monthly shifts are merely fluctuating around that flat trend. The data is not consistent with any notions that the Australian labour market is booming or close to full employment. The most continuing feature that should warrant immediate policy concern is the appalling state of the youth labour market. My assessment of today’s results – worrying with further weakness to come. The government has in the past few weeks insisted it will pursue its budget surplus obsession and announced further cuts in discretionary net spending. Not only will that act of fiscal vandalism fail but in doing so it will further undermine a very weak labour market.

The headlines this morning in Australia (economic policy wise) focused on the Government’s Sunday meeting where government departments in Canberra were instructed to find more spending cuts before Xmas as part of a renewed slash and burn of the Australian economy so that the Government can keep forecasting a budget surplus for the coming financial year. A few hours later, several major data releases from the Australian Bureau of Statistics came out, which showed that the Australian economy is slowing – fairly significantly. The latter clearly demonstrates the folly of the former. But try telling that to a government that preaches to us about its economic credentials yet designs and implements its major economic policy initiatives based, purely on what it perceives to be in its political best interest. It is wrong about the former and, as events turn out, will also not achieve the political capital it is aiming for. The spending cuts are causing the economy to slow, which is defeating its quest for surplus. As a result it will be damaged for “failing to keep its promise” even though that promise was the height of vandalism. That tells you how unsophisticated the policy debate and knowledge about economic matters is in this country. it is also clear that the Australian economy is a long way from full employment. So today I examine one of the arguments that the conservatives use to refute my last conclusion. I consider the argument that the increased involvement of females in the labour force over the last 30 years has pushed up the unemployment rate that we consider to be consistent with full employment to around five per cent. That claim is not tenable.

Today’s release by the Australian Bureau of Statistics (ABS) of the Labour Force data for October 2012 reveals a labour market that remains weak, with employment growth failing to match the underlying population growth. The unemployment rate remains steady at 5.4 per cent because the labour force barely grew as a result of a continuing decline in the participation rate over the last 12 months. The fact that workers are giving up looking for jobs is a portent of a very sluggish labour market. So unemployment fell but hidden unemployment rose. The trend performance of the labour market is flat and these monthly shifts are merely fluctuating around that flat trend. The data is not consistent with any notions that the Australian labour market is booming or close to full employment. The most continuing feature that should warrant immediate policy concern is the appalling state of the youth labour market. My assessment of today’s results – worrying with further weakness to come. The government has in the past few weeks insisted it will pursue its budget surplus obsession and announced further cuts in discretionary net spending. Not only will that act of fiscal vandalism fail but in doing so it will further undermine a very weak labour market.

Today’s release by the Australian Bureau of Statistics (ABS) of the Labour Force data for September 2012 reveals a labour market that is weak and failing to produce jobs to match the pavce of the underlying population growth. Many commentators are suggesting today’s figures are not that bad – but that just shows how far we have lowered our expectations of what good is. It is unambiguously bad when an economy that is meant to be in the throes of the once-in-a-hundred-years mining boom cannot even generate employment growth to match the population growth. It is true that participation rose this month which added to the rise in unemployment. But the trend performance of the labour market is flat and these monthly shifts are fluctuating around that flat trend. The data is not consistent with any notions that the Australian labour market is booming or close to full employment. The most continuing feature that should warrant immediate policy concern is the appalling state of the youth labour market. My assessment of today’s results – worrying with further weakness to come. The government has no case to make for its pursuit of a budget surplus in the next fiscal year.

Today’s release by the Australian Bureau of Statistics (ABS) of the Labour Force data for August 2012 reveals a deteriorating labour market with all the indicators of merit in decline. Total employment fell, labour force participation fell and hours worked fell. Unemployment fell but only because the decline in the labour force outstripped the decline in employment – which means that the decline in unemployment was due to an increase in hidden unemployment. A decline in unemployment driven by a rise in hidden unemployment is not virtuous. Certainly this data is not consistent with any notions that the Australian labour market is booming or close to full employment. The most continuing feature that should warrant immediate policy concern is the appalling state of the youth labour market. My assessment of today’s results – worrying with further weakness to come. The government has no case to make for its pursuit of a budget surplus in the next fiscal year.

Today’s release by the Australian Bureau of Statistics (ABS) of the Labour Force data for July 2012 reveals a fairly flat labour market with modest gains in employment and hours worked which were sufficient to outstrip the underlying labour force growth and so unemployment fell by 2,500. That decline in unemployment was aided by a declining participation rate. In other words, some of the decline in unemployment was due to a modest increase in hidden unemployment. Certainly this data is not consistent with any notions that the Australian labour market is booming or close to full employment. The most continuing feature that should warrant immediate policy concern is the appalling state of the youth labour market. My assessment of today’s results – positive outcome but very weak (mostly flat) trend. The economy is just creeping along when it comes to creating jobs.

Last month my Labour Force commentary was entitled – Australian labour market – good signs but wait for the reversal. It didn’t take very long for the reversal to come, although I caution anyone drawing trends from month-to-month variations in this sort of data. Today’s release by the Australian Bureau of Statistics (ABS) of the Labour Force data for June 2012 reveals a weakening labour market with all the negative signs concurring – falling full-time employment, falling participation, falling hours worked and rising unemployment. If the labour force had not have contracted due to the falling participation rate, the unemployment rate would have been closer to 5.5 per cent rather than 5.2 as officially recorded. Certainly this data is not consistent with any notions that the Australian labour market is booming or close to full employment. The most continuing feature that should warrant immediate policy concern is the appalling state of the youth labour market. My assessment of today’s results – weak and weakening.

Today’s release by the Australian Bureau of Statistics (ABS) of the Labour Force data for May 2012 reveals a stronger labour market than last month with full-time employment growth evident and participation rising. The oddity of the results are that monthly hours worked declined indicating weakness. While the unemployment rate rose to 5.1 per cent (and is still way too high), the reason for the rise in unemployment is that employment growth was outstripped by labour force growth which is a sign of a strengthening labour market. Of-course, the data is highly variable between months and the trend remains weak. Certainly this data is not consistent with the outstanding real GDP growth figures revealed in yesterday’s National Accounts. The most disturbing aspect of the labour market data remains the appalling state of the youth labour market. My assessment of today’s results – good signs but I will wait for the reversal next month.

Today’s release by the Australian Bureau of Statistics (ABS) of the Labour Force data for April 2012 reveals a weak labour market with the employment gains being confined to part-time work and workers dropping out of the labour force due to the limited available vacancies. While unemployment fell by 28.8 thousand, the drop in participation accounted for 26 thousand of that – meaning the Australian economy has been busy over the last month converting the official unemployed into hidden unemployed. This is not a “good” outcome as some in the media and the Government are claiming today. The outlook is also not very positive either given the Federal government’s obsessive pursuit of a budget surplus which will cut economic growth by some percentage points. They are even boasting that if growth falls short and tax revenue shrinks they will impose even further cuts on spending and/or increases in taxes. At that point the word idiocy comes to mind. The most disturbing aspect of the labour market data remains the appalling state of the youth labour market. This should be a policy priority for the government. But they have gone missing in action – lost in their surplus mania. My assessment of today’s results – very subdued indeed. I will be on ABC Radio National Drive program tonight from 18:15 talking about today’s data! Live Feed.