I saw an Australian Broadcasting Commission (ABC) economics commentator today headlining “The unemployment rate has fallen to 3.9%”. That implied something good had happened. In fact, not only did the Australian Bureau of Statistics (ABS) say the rate was unchanged (rounded) but the participation also fell, which means the underlying unemployment situation deteriorated. Two days out from a federal election, the ABC should be doing better than that. His Tweet was pure misrepresentation. All this followed the ABS release of the latest labour force data today (May 19, 2022) – Labour Force, Australia – for April 2022. The labour market deteriorated somewhat in April as employment growth was virtually zero and the participation rate fell by 0.1 points. While the official unemployment rate was unchanged when rounding to one decimal place on 3.9 per cent, it would have been higher (4 per cent) had the participation rate remained constant. In other words, hidden unemployment rose by 19.9 thousand. There are still 1.389 million Australian workers without work in one way or another (officially unemployed or underemployed). The only reason the unemployment rate is so low is because the underlying population growth remains low after the border closures over the last two years. My underlying (‘What-if’) unemployment rate is closer to 6.4 per cent rather than the official rate of 3.9 per cent. Finally, with real wages falling so sharply and employment growth virtually zero, one realises that the mainstream claim that lower real wages are good for employment is bunk!

The Australian Bureau of Statistics released the latest labour force data today (March 17, 2022) – Labour Force, Australia – for March 2022. The labour market steadied after the huge rebound last month as the Covid restrictions were substantially dismantled. Employment growth was modest. There are still 1.43 million Australian workers without work in one way or another (officially unemployed or underemployed). We are seeing the impact of flat population growth coming up against growing demand for workers and that is the reason the unemployment rate has fallen so quickly. The underlying (‘What-if’) unemployment rate is closer to 6.4 per cent rather than the official rate of 4 per cent.

I was going to comment on the Spring Statement delivered by the British Chancellor yesterday, but Spring is meant to be a happy, sunny time and the Statement missed the mark on that score. I also need to do some more calculations before I really know the full depth of despair that the British government is delivering on its people. So next week. Maybe. But in the spirit of calculation, I wanted to check how easy it is to get a job in Australia at present after hearing some character on the radio yesterday say that it has never been easier. I thought with unemployment getting lower as the external border has been largely shut for 2 years, there might be some credibility in that claim. But one has to check these things and I was interested in whether the border closures have materially altered the transitions between the labour force states. So I updated my databases and went to it. There was some jazz playing in the background to ease the strain! Result: the claim is partially true.

The Australian Bureau of Statistics released the latest labour force data today (March 17, 2022) – Labour Force, Australia – for February 2022. Last month the labour market took a dive as workers became increasingly sick from Omicron and the relaxation of the lockdowns and restrictions. This month a rebound. Next month? Floods and a new variant – stay tuned. Employment growth was very strong this month but it won’t last. Unemployment is down to the pre-GFC levels which is good as employers continue to face a restricted labour supply. When they get around to offering higher wages given their booming profits is another question. Participation is at peak levels which is good and underemployment is falling. All these are signs of an improving situation for workers but only within this weird bubble we are in – not much external migration yet and a Covid roller coaster of sickness, new variants, not to mention the floods. The flat population growth as external borders remain largely closed (or there is a slow take-up of international travel opportunities from foreign tourists) has helped keep the unemployment rate low. But it is a temporary reprieve I think. My ‘What-if’ unemployment rate of 6.4 per cent is closer to the mark of where we are at present once things normalise (whatever that means).