Economy

Unemployment lurches up while government navel-gazes

Bernard Keane /

The extent to which the Abbott government’s woes have effects in the real world of Australian lives was on display in last week’s January unemployment numbers from the Australian Bureau of Statistics.

First, the good news: the number of aggregate hours worked in January was up a lot — 0.5% seasonally adjusted. And part-time employment rose nearly 16,000 jobs, seasonally adjusted.

But nationally, unemployment rose 0.3 points to 6.4%, the highest in over 12 years. That more than reversed the surprise fall in December to 6.1% from 6.2% in November. In trend terms, unemployment remained steady at 6.3%. Participation was steady at 64.8%, seasonally adjusted, so the big rise in unemployment was not due to participation. It was driven by a fall of 28,000 in full-time jobs.

There was a 0.3 point rise in unemployment in NSW to 6.3%, where participation dropped 0.1 of a point. It dropped the same in Victoria, where unemployment rose to 6.6% from 6.5%. In Queensland, the final legacy of the Newman government was a 0.3 point rise in unemployment to 6.5%, off the same small fall in participation as in NSW and Queensland. South Australia saw a big rise in unemployment, from 6.6% to 7.3%, but the numbers in smaller states are always more volatile, and it was accompanied by a 0.7 point jump in participation. Western Australia recorded a fall of 0.3 points to 5.9% unemployment, off another 0.1% fall in participation, while unemployment was flat in Tasmania at 6.6%.

Overall, the numbers show that, as forecast, the jobs market slowed at the start of 2015 after a strong finish to 2014. That strong quarter coincided with problems around the accuracy of the ABS jobs data. But in a note with the release, the ABS made it clear those recent problems had no impact on the January figures:

The increase in unemployment in January 2015 in original and seasonally adjusted terms has not been caused by the recent changes to the ABS supplementary survey program.

“Historically, the ABS had not conducted supplementary surveys in the December and January months, and no supplementary surveys were conducted in December 2014 and January 2015.”

It continued:

The increase in unemployment in original terms is due to:

  • a net increase in unemployment in persons who responded to the labour force survey in both December and January (the ‘matched sample’),
  • a contribution from the incoming rotation group compared to the group it replaced, and
  • a contribution from persons who responded in December but not in January and vice versa.”

“Overall response rates for both December and January were in the ABS’s target range of 93% to 95%,” the ABS added. Adding to the need for caution about the jobs data was the number of jobs added to the economy in December being revised upwards from 37,400 to 42,300. A downward revision would add to any feeling the jobs data for January was showing a weakening demand for labour.

The overall result bears out the RBA’s obvious concerns about the fragile state of growth in the economy. And the concerns of the rest of us that the Abbott government doesn’t have the wherewithal to address it.

This story originally appeared on Crikey.

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Bernard Keane

Bernard Keane is Crikey’s political editor. Before that he was Crikey’s Canberra press gallery correspondent, covering politics, national security and economics.

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