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.