Today the ABS released the Labour Force data for May 2010 which show that the unemployment rate has fallen by 0.2 percentage points ostensibly, if you believe the press reports and the comments from the bank economists, on the back of continued strong growth in full-time employment. The truth is different. While full-time employment growth was positive it is not accelerating and overall employment growth slowed in May 2010. More importantly, all the fall in unemployment was due to a further drop in the labour force participation rate. So employment growth remains sluggish and is barely keeping pace with the growth in the population. The good news is that aggregate hours worked continued to increase which is reducing underemployment a little. While the bank economists have hailed today’s figures as indicative of an economy “near full capacity”, the reality is that the data is consistent with a broad array of statistics showing the Australian economy is slowing as the effects of the fiscal stimulus dissipate and and private spending remains subdued. It is amazing how a few headlines can distort what is actually going on.

Australia’s economy is apparently booming. At least that is what all the current public rhetoric is suggesting. Wage breakouts are apparently looming and the Mining boom (is) too hot for Canberra to handle. Today the ABS released the Labour Force data for April 2010 and the data reveals that while there are positive developments in the labour market, employment growth remains sluggish and is barely keeping pace with the growth in the population. Unemployment rose a tad as a result. While the bank economists have hailed today’s figures as “stellar” and indicative of an economy “near full capacity”, I consider their judgement to be seriously impaired and biased. Conditions in the Australian labour market are, in fact, fairly subdued. As I said last month – with the declining fiscal stimulus and private spending remaining subdued – today’s data doesn’t represent a place we would want to be in for very long.

Today the ABS released the Labour Force data for March 2010 and the data reveals that employment growth is very tentative and unemployment is rising. Unemployment rates in the populous states have risen. Further, labour force participation fell which makes the situation even more sombre. The bank economists have claimed that this is a picture of a near booming economy with wage inflation and skills shortages becoming the main focus. I consider their judgement to be seriously impaired and biased. Amidst all the talk about strong employment growth and wage breakouts about to happen – conditions in the Australian labour market are, in fact, very tepid as the impact of the fiscal stimulus wanes. With the declining fiscal stimulus and private spending remaining subdued – today’s data doesn’t represent a place we would want to be in for very long.

In a way this is an extension of yesterday’s blog where I argued that the gap between the outlandish statements coming from the media and other commentators about how the economy is tracking and the actual data is substantial. Today the ABS released the Labour Force data for February 2010 and the data reveals that employment growth stalled and unemployment rose again. The “markets” (those geniuses) had factored in a solid employment growth which only suggests they know how to extrapolate on recent data points. Further, labour force participation fell which makes the situation even more sombre. So amidst all the talk about employment going ape and wage breakouts about to happen – things have cooled somewhat as the impact of the fiscal stimulus wanes. Yes, its a monthly result and the trend is still mildly positive. But with the declining fiscal stimulus and private spending remaining subdued – today’s data doesn’t signal a steam train economy.

Today the ABS released the Labour Force data for January 2010 and there was quite a strong growth in employment reveals, albeit it was dominated by part-time growth. The employment boost confounded the “markets”, some of the so-called experts had “factored in” contraction (so I guess their clients are dudded by their incompetence again!). With participation constant, the net jobs growth translates into solid reductions in unemployment. Unfortunately, total hours worked plummetted so I suspect it will be a grinding part-time led recovery. But the good news is that unless something bad happens elsewhere in the World we are now well over the aggregate unemployment rate peak and surfing down the face!

Today the ABS released the Labour Force data for December 2009 and it confirms that the Australian economy is still recovering under the steam of the fiscal stimulus. Total employment has grown by three times more than expected and participation is constant. Which means that unemployment has started to fall although underemployment hasn’t budged. While the media commentators today (including myself) have been fairly upbeat I have been reminding the public in media interviews that I have done that broader labour underutilisation (sum of unemployment and underemployment) remains at 13.5 per cent. But optimistically the trend is now looking as though the aggregate unemployment rate may have peaked. So it is now to start looking beyond the peak.

Today and tomorrow I am hosting a workshop – ARCRNSISS Methods, Tools and Technologies workshop in Newcastle for the Spatially integrated social science research network that I am part of. This is a technical workshop on regional modelling which I host annually. So back to back with the CofFEE Conference last week means we have been very busy. I will write a blog about the work we do in the regional science area another day (it is very technical). But today the Australian Bureau of Statistics (ABS) published the November Labour Force Survey data and it shows that full-time employment is growing and the unemployment rate has fallen (by 0.1 per cent to 5.7 per cent). While underemployment is constant, the data suggests that the negative impact on the labour market may have peaked. But as I caution in this blog, regional disparities are huge and it is not the time to start talking about fiscal contraction.

Today the latest Labour Force data came out from the ABS and it surprised everyone who watches these releases. Employment is up (full-time stronger than part-time); working hours are up; participation is up, unemployment is down and the demand-side outstripped the supply-side, so the unemployment rate falls by 0.1 percentage points. Everything about that is good. Several commentators are now saying that the RBAs decision on Wednesday to put the short-term interest rate up is now vindicated. I don’t think so. Things remain grim and that last thing we need now is any contractionary policy impulse.