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.