Today’s release by the Australian Bureau of Statistics (ABS) of the Labour Force data for January 2012 shows that the deterioration in the Australian economy towards the end of the year has temporarily ceased although working hours have fallen sharply. The data shows that employment has recovered a little and unemployment fell as a response – both good signs. The employment growth, however, is dominated by part-time jobs growth and underemployment is almost certain to have risen in January. The fall in hours worked is consistent with that conclusion. So the news is mixed this month. I still consider the Federal government to be undermining our prosperity by pursuing its obsession to get the budget back into surplus in the coming year. The most disturbing aspect of the labour market data over the last year or more has been the appalling state of the youth labour market. Teenage females did gain some modest relief this month from the relentless loss of jobs, but teenage males continued to go backwards. 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 – mixed news with little to be happy about.

In the last few weeks I have done several radio interviews about the veracity of the labour force data published by the Australian Bureau of Statistics. The pretext has been an increasing awareness among commentators and journalists of an alternative series published by pollster – Roy Morgan. The juxtaposition of an ABS unemployment rate estimate for December 2011 of 5.2 per cent against Roy Morgan’s estimate of 8.6 per cent worries people and curious minds have been seeking to find out what is going on. The curiosity also extends to matters like seasonal adjustment. Last week, I consistently said that in seasonally adjusted terms people were dropping out of the labour force (as evidenced by the falling participation rate), which had lessened the impact of the negative employment growth on the unemployment. But in one interview I complicated matters by saying that in fact more people were in the labour force in December and employment rose. The two statements were not inconsistent. The former was about the seasonally-adjusted data and the latter was about the original time series produced by the ABS. I often get E-mails about this question. Which estimates should we use to tell us what is going on? So I thought I should write a blog about that – to catalogue these issues.

The January release of the Labour Force data is always a week later than the releases in other months as we enjoy the summer holidays. But the wait hasn’t improved the news. In December 2011, my headline was “everything is bad” meaning that the evil three – falling employment, rising unemployment and falling participation – had appeared. Today’s release by the Australian Bureau of Statistics (ABS) of the Labour Force data for December 2011 shows that the deterioration in the Australian economy towards the end of the year gathered pace. The data shows that employment has fallen and the participation rate has fallen sharply. This is the worst combination that can occur indicating that job creation is declining, workers are leaving the workforce because of the lack of job opportunities and labour underutilisation is rising. So while the Government continues to pursue its obsession to get the budget back into surplus in the next year, it is actually only succeeding in undermining employment growth and prolonging unemployment. The most striking expression of how poor the Australian labour market is performing is the continued deterioration of the youth labour market. That should be a policy priority but unfortunately the government is largely silent on that issue. My assessment of today’s results are that – everything is bad and getting worse.

The Australian Bureau of Statistics (ABS) published the Labour Force data for November 2011 today. The data shows that employment has fallen, the participation rate has fallen and unemployment (and the unemployment rate) have risen. Monthly working hours have also fallen. This is the worst combination that can occur indicating that job creation is declining, workers are leaving the workforce because of the lack of job opportunities and labour underutilisation is rising. So while the Government and the uninformed were celebrating yesterday’s National Accounts data which showed that three months ago Australia was growing (below trend), today’s results are more immediate – they are a depiction of where things are now. The Government is undermining employment growth by insisting on its obsessive pursuit of a budget surplus. The most striking expression of how poor the Australian labour market is performing is the continued deterioration of the youth labour market. That should be a policy priority but unfortunately the government is largely silent on that issue. My assessment of today’s results are that – everything is bad.

The Australian Bureau of Statistics (ABS) published the Labour Force data for October 2011 today. The data shows that employment barely grew and thanks to an artificially low labour force growth rate was just sufficient to allow unemployment to fall slightly. However, most of the drop in unemployment was due to a slight decline in the participation rate. The data is not bad but it is certainly not good and points to a weak economy overall. How long that remains is anyone’s guess in these uncertain times where governments have largely abandoned any plans to provide fiscal support to help the economies grow. The recent acceleration of the crisis in Europe should not impact negatively on our labour market if the Government is flexible enough to abandon its obsessive pursuit of a budget surplus. The black spot in the data today is the continued deterioration of the youth labour market. That should be a policy priority but unfortunately the government is largely silent on that issue. Overall, the Australian labour market is just staggering along.

The Australian Bureau of Statistics (ABS) published the Labour Force data for September 2011. It shows that a labour market that has arrested the decline evident in the previous two months but is barely keeping pace with underlying population growth and shedding working hours. The data is not bad but it is certainly not good and points to a weak economy overall. The best I can say about today’s data release is that the labour market is now not accelerating in reverse gear. How long that remains is anyone’s guess in these uncertain times where governments have largely abandoned any plans to provide fiscal support to help the economies grow. Overall, the Australian labour market is very tepid at present with a downward bias.

The laboratories are multiplying. We are in an interesting period – I say that in an intellectual sense only – where stark policy decisions have been taken based on certain theoretical economic claims and regular data is arriving which allows us to assess the viability of those claims. So as a researcher it is interesting. As a person I don’t find it interesting that governments are prepared to gamble with peoples’ lives in a self-serving way to appease the elites that fund them. For many years we have had Japan as an Modern Monetary Theory (MMT) laboratory. I gave a talk here in Maastricht yesterday and asked how any mainstream economic theory could explain Japan over the last two decades or so. By any standards if the mainstream macroeconomic theories were of any value then Japan should have very high interest rates and accelerating inflation and the government should have gone broke. It hasn’t and that tells you the value of mainstream theory. Now we have various fiscal austerity experiments being undertaken and the data is coming in daily to tell us that the claims made about the certainty of a “fiscal contraction expansion” are spurious. The most recent British labour force data released this week provides a very interesting laboratory terrain. Two geographic regions within the same nation, two governments (of different status) and two very different economic policy approaches. Result: one side of the border the labour market deteriorates, the other side it improves. So this blog is a tale of those two labour markets – one south of a border the other north. The data provides further evidence that fiscal austerity damages economic prosperity.