The jobs data is steady, which might be disappointing for some.
The jobs data were released last week, and it seems to me that the dust has settled, and the data is giving us a pretty good look at where the market is at.
First up, unemployment nudged higher to 6.9% from 6.8% the month before. So that’s a steady outcome, and after the see-sawing of recent months, is probably indicative of how many people are actually unemployed.
That said, 6.9% is still the highest levels we’ve seen this millennium, and suggests that there’s still more pain in the pipeline, especially since Jobkeeper has been keeping the unemployment rate down.
When you break it down, the number of employed people fell by 30K, which isn’t massive, and the participation rate edged lower, but not in a major way.
So we’re probably past the see-sawing, and the data is landing at its new level.
And that level, like activity, seems to be about 90% of it’s pre-Covid level. It’ not so pronounced in the employment data…
But it is very clear in the total number of hours worked:
And the average monthly hours worked per employee continues to tank, and has shown no recovery so far.
This is the Jobkeeper effect. Employment is holding up, but the number of hours worked points to the fall in economic output.
When you break it down by state, there’s no major surprises, with Victoria clearly feeling the brunt of the impact.
Victoria accounts for about two-thirds of the 360,000 jobs that have been lost this year.
And when you look at the aggregates, the key thing that jumps out at you is the surge in the number of unemployed people, which is up over 30%.
So all in all, this is not pointing to a V-shaped recovery.
The economic hit has been substantial and it’s not going away anytime soon.
Yes, things are steady, maybe even improving slightly, but there’s a big adjustment that needs to work its way through the system.
A 30% increase in the number of unemployed in a matter of months is a big shift.
And we’re now starting to enter the period where JobKeeper is starting to be wound back.
The hope is that business conditions will improve quickly enough to offset the fall in Jobkeeper.
But if that improvement is happening, it’s not in the employment data just yet.
So Canberra, take note.
The other thing worth noting is how much of a regional story this is.
If you look at the new job ads data from Seek, you can see that we’re still kicking around 80% of normal levels.
But when you break it down by state, it’s largely a Victoria and NSW story.
Job ads in SA and WA are actually higher now than they were when the crisis started!
That sends a clear message to the premiers.
Stay healthy at whatever cost.
DB.