Today’s release by the Australian Bureau of Statistics (ABS) of the Labour Force data for January 2013 reveals that the Australian labour market continues to slide. While total employment rose modestly (very), full-time employment fell for the third consecutive month and working hours also fell. The small rise in unemployment would have been much worse had not the participation rate fell again. The unemployment rate remained unchanged at 5.4 per cent but would have been at least 0.1 per cent higher had the participation rate not fallen. So both unemployment and hidden unemployment rose. The rate of employment growth is not sufficient to even keep pace with the underlying population growth. 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 – a failing economy with further weakness to come. The Government realised late in 2012 that its obsessive pursuit of a budget surplus was going to fail. It should now go one step further towards becoming economically responsible and reverse the direction of fiscal policy by introducing some significant direct job creation. The budget deficit is too low in Australia by perhaps 2-3 per cent of GDP.