Is the sky falling?

Unemployment Rate - Oct 15



It would seem things are not as bad as some of the journalists want us to believe?

 

The employment figures were a bit of a surprise to me (but a good one for our economy).

I reckon some of it was to do with sampling bias but lets see how they play out over the next few releases. It would be great for Aus to see a continual drop in unemployment

 

Like different property markets doing different things at different times, some states such as SA are doing woefully, NSW is going great.
QLD picking up was a surprise, hopefully house values follow there too.

 

@Steven Ryan... sampling bias? This is ABS data would they chop and change? I thought they were above such tactics. Interested to know if you have the inside goss.

 

Thanks for the share! I don't pretend to know specifics on how the ABS and other data-shops source and quantify their data.. but I'd hazard a guess that that chart only accounts for 'all employed, in all classifications of employment', which is usually a rosier picture to paint.

Reason being is, it buckets full time, part time, casual, and contractor employment statuses together. This can be misleading as full-time employment is the particular bucket we should be paying attention to. F/T is on a steady decline, replaced by less-secure Part-time, casual, and contractor roles.

 

I agree in that FT is the most important of the lot.
Dunno about the stats and methods used..
The reason why FT is less preferred is because the cost:benefit is worse than the other employment types. For that to change, either ft costs reduce, the value ft employees deliver increases, or a bit of both

 

The issue with the ABS employment data is the sample size. A couple of years back they cut this down to a fraction of the size to reduce costs. Now it's super lumpy and you need to look at the longer term trend.

 

@BuyersAgent - @Dmarkw hit it. Small sample.. it's to be taken with a grain of salt until a trend emerges.

From the ABS website on employment data sample:

 

Would give no credence to all these states... ask RetireRich101...stats are pretty useless unless you are trending the data.

From where I sit...the question to ask of the jobs created are they of sufficient quality..are they full or part time or causal. Me thinks most are casual...Australia has among the highest casual workforces in the world.

From where I sit, this is what I think is happening:

1. Most jobs created are mostly part time or casual
2. Lots of companies dumping expensive staff and hiring cheaper staff
3. Lot of overseas outsourcing.
4. A lot of the Australian work force is not prepared for the new economy..

 

Fair enough thanks all - good to know. Also @sash good points regarding diff between ft/pt/cas plus the quality issue.

 

This.

It's anecdotal of course, but for a few years now I have not heard much in the way of good news by the business community.

There are good areas of course, but generally; no.

Add to this the myriad and constant reports of large job losses all over the Country by various businesses, and i find it hard to believe that full-time permanent jobs are actually increasing.

My suspicion is the stats are being misrepresented - lots of full-time jobs being "restructured" into part-time and casual positions, as well as less folks participating in looking for work, which makes those who are looking and have found one look more attractive.

 

Did anyone actually read the whole report? They seperate full time and part time stats...

Australian employment at record high in November as both part-time and full-time employment increase strongly

7,554,000 Australians are employed full-time (up 84,000 since November 2013)

 

Hehe..Nup..no one read the report...the celebrity apprentice was on at that time with one dingbat vs another...just had to watch it lol

 

@sash is it me or is only 83,000 added full time jobs since 2013 quite a low figure for a national index?

I guess the net ft jobs loss of contracting auto, mining, and manufacturing sectors has hacked into the ft growth figure substantially.

The curious thing is this: if the 'new world' is to see less ft and more pt and casual jobs... I can only imagine this would benefit us property investors. Why? Less ft ppl in the workforce = less first home buyers getting approvals on loan applications (sure, some smaller lenders will take them on, but come on, let's be honest here, in this 'new lending world', the chances of pt and casual workers - no matter how impeccable their work history is - getting mortgages is heavily reduced) = more people staying in the rental pool longer and longer = more upward pressure on rental demand = higher rents... you get the picture.

Those that can afford to acquire property portfolios in high demand suburbs and towns should be positioned to do well (well... at least from a yield perspective...), no?

 

God I can't stand that show!

http://www.abs.gov.au/ausstats\[email protected]?Opendocument

The ABS reported the number of people employed increased by 58,600 to 11,838,200 in October 2015 (seasonally adjusted). The increase in employment was driven by increases in male full-time employment (up 33,500) and female part-time employment (up 24,000).

 

Doesn't that also work in the reverse = property prices to fall if no one can afford them?

 

I am not economist....but your parallel has merit. Employment figures are a lagging indicator....I am not a huge fan of stats as it is typically rear view looking.

Here are my thoughts:

1. Mining has pulled back and this is not a significant employment contributor as it is capital intensive but is in WA, Qld any pull back will affect those states. It also contributes a large part of exports for Australia. A pull back will affect the deficit and thus pull out of govt funds which will also cause cuts in govt funding which will affect the economy.
2. Building has been keeping the economy going. This includes residential as well as infrastructure and commercial stuff. Housing is trending down after a period of high growth. This is significant employer of people...any pull back will reverberate through the Australian economy and if it takes till take 0.5-1% of GDP growth with it.
3. Agriculture was doing really well...but will be interesting to see how the that does with the potential El Nino affect....
4. Govt spending...if we have a govt which is hell bent on cutting the deficit...at a time when the economy in Australia is limping along..this will have an affect people....
5. Immigration has been reduced...this also adds significantly to economic growth.

So based on above...I am not so positive about employment number in Australia. Also we have been lazy and have not addressed productivity as we did under Keating/Hawke. Instead we collectively votes govt which simply fiddled with budgets under mostly the libs who have not done very much nation building.

My 2 cents as a economist....

 

And just saw today business wage growth at a low point.

 

Business investment is also low across the board - and Banks aren't to free with Comm l;en ding these days either, so I don't know where they get these rose coloured glasses figures from.

 

What's worth considering is that underemployment is now up to 9%, which is the all time high since they've kept the stats.

Also that 84,000 extra full time employed doesn't seem quite as impressive when you compare it to the population growth of roughly 700,000 in the same time period, even more worrying when you consider that 55% of that is migration as well, so not like you can say it's some kind of baby boom or something, on the migration alone assuming that the average family coming over is a 2 parent, 3 child setup that should have been 155,000 new jobs alone. That completely ignores anyone in Australia becoming an adult in that 2 year period.

The unemployment stats are naturally cooked at the best of times by ignoring people who've given up but the trend towards underemployment is at least recorded and it's up 2.5% in the last 2 years which is certainly a worrying sign. Perhaps scarier is that the unemployment/underemployment rate for those in the 15-34 range is the worst it has been since 1992 when it was the worst it's ever been (unemployment is slightly better, underemployment is considerably worse, the combined total is far worse now though) which is a real indicator that very few new full time jobs are being created, even more scary when you factor in that that labour market has actually shrunk in the last 8 years meaning the stats are even worse because people have just given up looking.

The positive is that at least a lot of people that are losing their jobs are finding part time replacements to survive on but I don't think a part time economy is really a way forward, it's certainly not how you increase the nations wealth.